Mexico's economy loses steam

Sluggish manufacturing and falling exports to the U.S. are blamed for the deceleration. Slowing growth could spur emigration.

By Marla Dickerson
Times Staff Writer

February 17, 2007

MEXICO CITY — Mexico's economy slowed in the last three months of 2006, and that could have consequences in the United States: Tough times in Mexico typically fuel immigration north of the border.

Mexico's gross domestic product expanded 4.3% in the October-to-December period from the final quarter of 2005, according to figures released Friday by the finance ministry. It was the third consecutive period of slower growth in the nation's economic output and a sharp decline from the 5.5% expansion registered in the first quarter.

The deceleration was blamed largely on a sluggish factory sector and a slowdown in exports to Mexico's principal customer, the United States.

Some analysts believe it portends a challenging year ahead for new President Felipe Calderon, who campaigned on promises of creating millions of jobs and vibrant economic growth for Mexico.

"When I took a look at some of the numbers I said, 'Uh-oh,' " said Eugenio Aleman, a senior economist for Wells Fargo & Co. in Minnesota. "Things are not looking good."