OECD cuts Mexico's 2016, 2017 growth forecast

The Organization for Economic Cooperation and Development (OECD) on Monday downgraded its 2016 and 2017 economic growth forecasts for Mexico.

Citing the political uncertainties introduced by U.S. president-elect Donald Trump, among other factors, the OECD's latest November figures predict the country would register economic growth rates of 2.2 and 2.3 percent respectively for this year and next year.

An earlier July report had projected 2.6 percent for 2016 and 3 percent in 2017.

"Growth will be held back in 2017 and 2018, mostly through investment and consumer confidence, following uncertainties about future U.S. policy, although the economy could benefit from stronger import demand from the United States," the OECD's November "Global Economic Outlook" said.

Trump promised to renegotiate the North American Free Trade Agreement (NAFTA) between the United States, Mexico and Canada, in his presidential campaign.

While Canada seemed immediately amenable to the proposal, Mexico instantly reacted with horror, betraying a nervous awareness of its overreliance on its northern neighbor, analysts said.

The OECD also attributed Mexico's reduced growth forecasts to "the fall in oil prices, which reduced government revenues, cutbacks in investment in the energy sector and the severe depreciation of the Mexican peso."

The OECD recommended Mexico "raise spending on programs conducive to inclusive growth for Mexican families -- such as child care, health, poverty reduction and infrastructure." Endi