November 5, 2013 / 8:05 PM / 5 years ago

Mexico's Carstens sees signs Mexico's economy is recovering

MEXICO CITY, Nov 5 (Reuters) - There are signs that Mexico’s economy is recovering, and a government tax overhaul approved by Congress will have only a transitory impact on inflation, Mexican central bank chief Agustin Carstens said on Tuesday.

Latin America’s No. 2 economy shrank in the second quarter by 0.7 percent, its first contraction in four years, as lower government spending and a slowdown in the construction sector weighed.

However growth in the third quarter accelerated to about 0.9 percent compared to the prior three months, the finance ministry said last week.

Mexico’s Congress passed a package of measures last week aimed at bolstering the country’s weak tax revenues, but only after watering down a plan that is expected to have a moderate impact at best.

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