UPDATE 3-Mexico cuts economic growth forecast after weak 1st quarter
(Recasts with government growth revision, comment from Cemex executive)
By Michael O'Boyle and Jean Arce
MEXICO CITY May 23 (Reuters) - Mexico's economy grew less than expected in the first quarter due to weak domestic demand and sluggish industrial activity, prompting the government to slash its growth outlook to below three percent for 2014.
The country's gross domestic product grew 0.3 percent in the first quarter from the last three months of 2013, when it expanded by a downwardly revised 0.13 percent, the national statistics institute said on Friday.
A Reuters poll had forecast growth of 0.46 percent.
At an annual pace, GDP expanded 1.8 percent in the first quarter from a year earlier, below expectations for 2 percent growth but up from a 0.7 percent rise in the fourth quarter of last year.
After the data was released, the finance ministry cut its growth forecast for 2014 to 2.7 percent from a previous forecast of 3.9 percent, the second year running in which President Enrique Pena Nieto's government has had to lower its outlook.
Higher government infrastructure spending has helped pull the construction sector back from a sharp contraction in 2013, but exports stagnated, and factory output dipped in March.
"This confirms that the economic slowdown that began last year spread into this year," said Delia Paredes, an economist at Banorte in Mexico City. "Still, we are now starting to see some signs that the economy is rebounding," she said, pointing to a recent pick up in consumer confidence and stronger exports. Continuación...