UPDATE 2-Mexico central bank cuts growth outlook for 2015, 2016
(Adds detail on oil production, rate cuts and fiscal outlook)
By Joanna Zuckerman Bernstein
MEXICO CITY May 19 (Reuters) - Mexico's central bank lowered its growth outlook for this year and next on Tuesday, flagging concerns about the sluggish economy, but the bank's governor Agustin Carstens signaled further rate cuts were unlikely.
The central bank said it now sees growth in 2015 between 2.0-3.0 percent, down from the 2.5-3.5 percent in its last report, pointing to weak export growth to the United States, a drop in domestic oil output and still sluggish consumer demand.
The bank also lowered its 2016 forecast to between 2.5-3.5 percent from 2.9-3.9 percent. But the gloomier growth outlook does not mean borrowing costs are set to drop, Carstens said.
"The likeliest thing without a doubt is that we have to raise rates," Carstens said. "A scenario in which the board would consider reducing interest rates looks pretty remote."
Fears that an imminent U.S. rate hike may push investors to dump emerging market assets, as well as a slump in oil prices, have hammered Mexico's peso, which sank to a record low against the dollar in March.
Analysts polled by Reuters now expect the U.S. central bank to tighten monetary policy in the third quarter, after disappointing first-quarter U.S. growth.
The Banco de Mexico said it saw inflation slightly below its 3 percent target in the second half of the year. Continuación...