Output dropped 0.3 percent from a year earlier, the national statistics institute said on its website today, compared with the median estimate for a 0.7 percent expansion from 17 economists surveyed by Bloomberg. Construction activity fell 2.5 percent and mining output declined 1.3 percent.
A collapse by the nation’s biggest homebuilders, stagnant demand for exports and delays in government spending prompted the government to cut its growth forecast for 2013 four times, to 1.3 percent from 3.5 percent. The economy will rebound to grow 3.9 percent this year, according to the Finance Ministry’s forecast.
The central bank reduced interest rates three times in 2013 to a record-low 3.5 percent in a bid to jump-start growth. It kept the rate unchanged in the past two meetings saying that government spending will fuel growth in 2014.
Mexico’s peso traded little changed at 13.3332 per U.S. dollar at 8:20 a.m. in Mexico City, erasing an earlier gain of as much as 0.6 percent.
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