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UPDATE 2-Mexico raises 2011 GDP growth forcast to 4.3 pct
April 8, 2011 / 2:03 AM / 7 years ago

UPDATE 2-Mexico raises 2011 GDP growth forcast to 4.3 pct

(Updates with finance ministry statement)

ACAPULCO, Mexico, April 7 (Reuters) - Mexico’s President Felipe Calderon raised the forecast for the country’s growth this year to 4.3 percent as a recovery in the United States is helping to spur the economy of its southern neighbor.

“The (original) forecast ... was 3.8 percent for 2011. Today the finance ministry is adjusting its forecast to 4.3 percent,” for the year, Calderon told a banking convention in the resort city of Acapulco.

The finance ministry had already raised its growth expectations to 4.0 percent this month.

The new figure is in line with expectations of analysts polled by the central bank at the beginning of this month who saw 2011 economic growth at 4.25 percent.

The decision to raise the estimate was based on stronger economic output figures in January 2011 compared to the end of last year, accelerating external demand and positive domestic demand, the finance ministry said in a statement.

Increased employment, with 230,721 jobs created by the end of March compared to December last year, is also boosting growth, the statement said.

Mexico’s annual inflation rate slowed more than expected in March to its lowest level in nearly five years, giving the central bank ample room to keep borrowing costs on hold while the economy strengthens.

“The inflation rate of 3.0 percent in March is fully in-line with the Central Bank’s inflation target,” the ministry statement said.

Mexico’s Finance Minister Ernesto Cordero, speaking at the Reuters Latin American Investment Summit last week, said improved prospects for growth in the United States were now boosting Mexico’s own outlook.

Cordero also said last month that Mexico’s 2011 growth could exceed the 5.5 percent rate clocked in 2010, the fastest seen in a decade. (Reporting by Cyntia Barrera and Elinor Comlay; Editig by Kim Coghill)

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