Mexico’s Growth Slows as Oil Output Drop Outweighs Services

1/31/2017 Bloomberg Markets
energy - oil barrelsMexico’s growth slowed in the fourth quarter, dragged down by falling oil production, even before the full impact of President Donald Trump’s potential to hurt the economy was fully felt.

Gross domestic product rose 0.6 percent from the previous three months, according to preliminary figures released by the national statistics institute Tuesday, matching the median forecast of 16 economists surveyed by Bloomberg. That’s a slowdown from the third quarter, when the economy grew at the fastest pace in three years. From the previous year, GDP expanded 2.2 percent, also matching analyst projections.

The outlook for 2017 worsened significantly with Donald Trump’s election in November. Economists have cut growth expectations as his promise to end or overhaul the North American Free Trade Agreement and make Mexico pay for a border wall upset decades of stronger cooperation between the nations, damped investment projections and sent the peso to a record low. Surging gasoline prices have added to expectations for faster inflation, higher interest rates and a weaker economy overall.

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