Mexico slashes its 2014 growth forecast to 2.7%
May 25, 2014, 12:03 am TWN
MEXICO CITY--Mexico slashed its 2014 growth forecast from 3.9 percent to 2.7 percent Friday after a weak first-quarter performance linked to new taxes and an economic freeze in the United States.
The government revised its outlook after the national statistics agency reported 1.8 percent growth in the first quarter compared to the same period last year, a weaker-than-expected result.
The finance ministry acknowledged that tax hikes on items such as junk food and sodas, part of a fiscal reform that came into force this year, put a damper on growth.
But Deputy Finance Minister Fernando Aportela said the effects of the new taxes were only "transitory" and that growth would speed up in the next three quarters of the year.