Mexican economy grows 1.1 per cent in first quarter

MEXICO CITY: Mexico’s economy grew 1.1 per cent in the first quarter of 2018, according to figures released Monday, two months from a presidential election in which tepid economic performance is a central issue.

The uptick broke four straight quarters of less than one-per cent growth, but is unlikely to lessen voters’ frustration with the pace of Latin America’s second-largest economy and President Enrique Pena Nieto’s management of it.

The primary sector – mining, agriculture and related activities – led the growth for the period from January to March, while valueadded industries were stagnant, according to the National Institute of Statistics and Geography.

The Mexican economy has continued chugging along despite uncertainty surrounding its relationship with its key trading partner, the United States – the destination for some 80 per cent of its exports.

US President Donald Trump’s threats to end the North American Free Trade Agreement (NAFTA) between the two countries and Canada helped put a brake on the economy last year, when it registered growth of 2.3 per cent, including a contraction of 0.2 per cent in the third quarter.

The Mexican central bank is forecasting economic growth of between two and three per cent this year, citing NAFTA uncertainty as a drag.

The leading candidate to replace the deeply unpopular Pena Nieto, who cannot run for re-election, is veteran leftist Andres Manuel Lopez Obrador, who has vowed to shake up the economy and run a government for the poor.

That has caused jitters in the business sector, but his economic team has sought to reassure investors that the former Mexico City mayor would not in fact radically overhaul economic policy.

His rivals – Ricardo Anaya of the conservative National Action Party and Jose Antonio Meade of the ruling Institutional Revolutionary Party – have largely promised continuity on the economy and warn that Lopez Obrador would pose a threat to a landmark energy privatization and other reforms undertaken by Pena Nieto. — AFP