Nobody should be surprised. As the US’s economy flounders, Mexico, more than 80% of whose exports are purchased by its northern neighbour, is taking the hit.
Soon after the US Federal Reserve cut its key benchmark federal funds rate in January, Mexico’s government cut its 2008 growth forecast from 3.7% to 2.8%, a 24% slash. The country’s stock market index also hit a 10-month low, and fewer new jobs are forecast for 2008 weaker export demand in the US can hurt Mexican factories and thus cost jobs.