Peso at record low, growth forecast cut Peso at 17.28 as industrial growth flat, oil down and worries about China, among others

Peso at record low, growth forecast cut

Peso at 17.28 as industrial growth flat, oil down and worries about China, among others

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Mexico News Daily | Friday, August 21, 2015

The peso plunged today to a record low of 17.28 to the dollar to crown a week of dismal news, including another reduction in the growth forecast for this year, lower industrial output, sliding oil prices and worries about U.S. interest rates, China and Greece.

The Finance Secretariat yesterday reduced its forecast for growth this year to 2% to 2.8%, down from May’s figures of 2.2% to 3.2%. The Bank of Mexico lowered its forecast last week to 1.7% to 2.5%.

Those two factors are weighing on the economy, said Undersecretary of Finance Fernando Aportela. And Deutsche Bank economist Alexis Milo said industrial output “remains the main concern for growth.”The Mexican economy expanded by 0.5% in the second quarter, which was just above expectations. But industrial output was flat, another cause for concern, as exports to the U.S. were uneven and oil production continued to drop.

If there was any good news it was in the 0.9% expansion in the second quarter of the service sector, the strongest in a year.

Source: Reuters (en), Bloomberg (en)

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