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Friday 14 of June 2024

Mexico's Central Bank Lowers Growth Forecasts

Mexico's Central Bank expected 20,000 less jobs to be created in 2016 due to downward economic forecasts

MEXICO CITY — Banxico reduced by 20,000 new jobs the expected growth rate of the country’s labor market for 2016, consistent with adjustments in economic forecasts.

“There is an downwards adjustment of 20,000 jobs less in 2016 and 10,000 less in 2017”, he added, after presenting a graph illustrating the decrease in forecasts for jobs that Banxico had estimated would be generated alongside the economy’s performance, showing a fall from 630,000 and 730,000 jobs this year to only 610,000 and 710,000, while estimates for 2017 went down from 66,000 and 760,000 new positions to 650,000 and 750,000.

Banxico streamed the quarterly report live on social media as economic trends generated expectations.

Agustín Carstens Carstens, Governor of Mexico's Central Bank presented a disappointing a quarterly report. Photo: Cuartoscuro/Adolfo Vladimir.
Agustín Carstens Carstens, Governor of Mexico’s Central Bank presented a disappointing quarterly report. Photo: Cuartoscuro/Adolfo Vladimir.

This occurred after Mexico’s Central Bank has lowered its economic growth forecast for 2016 to between 2 percent and 3 percent. That range was down from 2.5 percent to 3.5 percent in the last quarterly report.

The report released Thursday covers the final quarter of 2015. The bank now predicts lower external demand due to less dynamic industrial activity in the United States and weaker demand from other countries.

The report also lowered its forecast for 2017 to a range of 2.5 percent to 3.5 percent. That was down from a 3 percent to 4 percent range in the previous report.

The adjustment comes as the Mexican peso against the dollar and oil prices have hovered near historic lows. Mexico’s Treasury has not indicated whether it will adjust its forecast.