Mexico’s economy is slowing sharply and will soon fall into recession, several economists predict, as Donald Trump’s changing tariff plans cast uncertainty over the relationship with its largest trading partner.
Mexico is one of the countries most vulnerable to the US president’s drive to reshore investment and close trade deficits. The country’s economy was already fragile, with the government cutting spending due to a gaping budget deficit and investors spooked by its radical judicial reforms.
Mexico’s GDP shrank 0.6 per cent in the fourth quarter of last year from the previous three months, while economic activity fell 0.2 per cent in January.
The central bank cut its key interest rate by 50 basis points on Thursday, warning that the economy would show weakness in the first quarter and that trade tensions posed “significant downward risks”.
Here is more from the FT.
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