Mexico’s central bank Governor Agustin Carstens said that the country’s economy can still expand as much as 5 percent this year even after the first quarter’s slower-than-expected growth.
The combination of a stronger U.S. economy, the recovery of domestic consumption and private investment “may help us reach the central bank forecast,” Carstens said today in an interview in Mexico City.
Latin America’s second-biggest economy grew less than analysts and President Felipe Calderon forecast in the first quarter, as mining and agriculture underperformed. Carstens said economic activity in the first three months of the year was affected by frost in the northern region of the country as well as by slower U.S. output.
“Mexico’s private investment has lagged but is recovering at a rapid rate and that can stimulate growth,” Carstens said. Banks are also more willing to lend, “supporting consumption, construction and housing. I believe bank lending may contribute to higher growth,” Carstens said.