September 21, 2017 / 11:47 PM / in 3 months

Citibanamex lowers Mexico 2017 GDP to 1.9 percent due to quake

MEXICO CITY (Reuters) - Citigroup Inc’s local unit on Thursday lowered its 2017 Mexico gross domestic product (GDP) growth forecast to 1.9 percent from 2.0 due to the impact of a massive earthquake that leveled buildings in the capital, the country’s economic heartland.

However, Citibanamex (C.N), in a client note, said this was a conservative estimate as they expected an improvement in economic activity at the end of the third quarter and in the fourth which would help counter the impact of Tuesday’s 7.1 magnitude tremor.

    The quake, which killed at least 273 people, also toppled buildings in the states of Puebla and Morelos, sparking a desperate hunt for survivors under the rubble. Another massive tremor two weeks ago killed at least 100 people and wreaked havoc in southern Mexico.

    Citibanamex said it expects a moderate fiscal stimulus from the government, and no changes in monetary policy. That fiscal stimulus would likely come from two emergency funds, it added, noting that Mexico was in much better shape to handle the impact of the quake than it was in 1985, when a similarly massive tremor devastated the capital.

    Reporting by Gabriel Stargardter and Sharay Angulo; Editing by James Dalgleish

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