UPDATE 3-Mexico cuts growth outlook after Q2 contraction, no recession seen

lunes 22 de agosto de 2016 14:11 GYT

(Updates with government revises down 2016 growth forecast)

By Gabriel Stargardter and Luis Rojas

MEXICO CITY Aug 22 (Reuters) - Mexico's economy shrank in the second quarter for the first time in three years, dragged down by the deepest slump in industrial output since 2009, and the government revised down its 2016 outlook, but it was not seen sliding into recession soon.

The contraction comes after a slump in crude oil prices hammered Mexico's economy and after the central bank aggressively hiked its benchmark rate in June following a sharp depreciation of the local peso.

Gross domestic product contracted by 0.2 percent from the prior quarter, seasonally-adjusted data from national statistics agency (INEGI) showed on Monday. Preliminary data in July showed a 0.3 percent slump and the economy grew a downwardly revised 0.5 percent in the first quarter.

The industrial sector, which includes manufacturing and crude production, contracted by 1.5 percent from the January-March period, its biggest drop since the first quarter of 2009.

Deputy Finance Minister Fernando Aportela told a news conference the government had revised down its 2016 growth outlook to 2.0-2.6 percent from a prior range of 2.2-3.2 percent, citing "unfavorable external conditions".

Aportela also said the government was lowering its public sector borrowing requirement for 2016 to 3 percent of GDP.

"It is not unlikely that this is the beginning of a softer growth path in Mexico," said Benito Berber, an analyst at Nomura in New York, adding that the prospect of a recession had increased but was still unlikely.   Continuación...