Mexico raises economic outlook despite Trump fears

MEXICO CITY: Mexico raised its economic growth outlook, saying it performed better than expected in the first quarter despite fears it would suffer from US President Donald Trump’s trade policies.

The economy ministry upgraded its 2017 forecast to indicate growth of between 1.5 and 2.5 per cent, from an earlier range of 1.3 to 2.3 per cent.

“The economy’s resistance to external shocks was reflected in a better than expected performance in the first quarter, which prompts an upwards revision of the private sector growth outlook,” it said in a statement.

It said the economy grew by 0.7 per cent in the first three months of this year compared to the previous quarter, driven mainly by the farming and services sectors.

Economists had warned Mexico’s economy could suffer from Trump coming to office after the US president vowed during campaigning to renegotiate his country’s major trade ties with Mexico.

Talks on overhauling the North Atlantic Free Trade Agreement between the United States, Mexico and Canada are expected to start in August.

Analysts remained cautious despite Monday’s data.

Analyst Joan Domene of Mexican bank Invex said in a note the country still faced “uncertainty about the future of its trade relations with the United States.”