In blow to Mexico’s president, economy contracts in first quarter

May 24, 2019

MEXICO CITY (Reuters) – Mexico’s economy contracted in the first quarter of 2019 from the previous three-month period, data showed on Friday, dealing a blow to the new government’s drive to convince investors it can boost growth in Latin America’s second largest economy.

President Andres Manuel Lopez Obrador took office in December pledging to ramp up lackluster economic growth and to improve job creation.

The economy shrunk 0.2% compared with the October-December period, according to data from national statistics agency INEGI.

In annual terms, however, the economy expanded 1.2% compared with a year earlier, slightly lower than the 1.3% growth preliminary data published last month showed.

Lopez Obrador is targeting average annual economic growth of 4% during his six-year term.

But some of his economic decisions have rattled investors, and private sector analysts have cut their Mexican growth forecasts for this year.

The International Monetary Fund on April 9 lowered Mexico’s 2019 growth outlook to 1.6% from 2.1% and to 1.9% from 2.2%, citing shifts in perception about policy under the new administration.

(Reporting by Anthony Esposito; Editing by Chizu Nomiyama and Susan Thomas)

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