Mexico reduces 2008 growth forecast

The Mexican government has dropped its growth forecast for 2008. The reason is the US economic recession worries plaguing most of the world.

The Mexican government announced that it must update its 2008 growth forecast as new information and fears of the US economic slowdown show no signs of leaving.

The US is Mexico's largest trader. Any economic slowdown there, which causes consumers to drop demand for Mexican made products, will trigger and hurt the economy of Mexico.

The growth rate has been dropped to just 2.8 per cent. This rate will mark the lowest rate of growth the country has seen in the last three years. Originally, the finance ministry there had planned for a 3.7 per cent expansion of the economy for 2008. The change is a drop of 24 per cent.

According to the Treasury Department, as reported by the Associated Press, "It is expected that the prevalent international economic scenario in 2008 will be less favourable for Mexico than what was anticipated in the economic plan submitted to the Congress in September 2007."

Mexico was believed to be somewhat shielded from such poor news due to its growing economy, tame inflation as well as its overall property market appeal. Yet, according to economists, neither Mexico nor any other country will be completely immune to the problems with the US economy.