Mexico posts 38.3 bln peso budget deficit in Q1

MEXICO CITY, April 30 (Reuters) - The Mexican government posted a 38.3 billion peso ($2.8 billion) budget deficit in the first quarter of 2009, in line with forecasts, the finance ministry said on Thursday.

Mexico plans to run a small deficit of 1.8 percent of gross domestic product this year to help offset the effects of the global financial crisis that threatens to push its economy into a deep recession.

An outbreak of a new flu virus that has killed up to 176 people in Mexico and prompted global health authorities to warn of a possible pandemic is expected to further weaken the economy.

The economy likely shrank by 7 percent in the first quarter, the finance ministry said, a figure in line with recent forecasts.

Mexico's economy has been hit hard by sliding demand from the United States for its exports. Mexico sends approximately 80 percent of its exports to its northern neighbor.

Government revenues fell 9.1 percent to 652.4 billion pesos in the first quarter compared to the same period last year before accounting for revenues under an oil price hedging program. If the hedges are included, revenues were down only 3.8 percent in real terms, the ministry said.

Total spending was 693.9 billion pesos, up 14.5 percent in real terms from the same period last year. ($1 = 13.84 pesos) (Reporting by Robert Campbell; Editing by Jan Dahinten)