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Mexico's economic growth slows in fourth-quarter as service sector cools

MEXICO CITY (Reuters) - Mexico's economy cooled in the fourth quarter as services growth lost momentum and industrial output was flat, preliminary data showed on Tuesday.

The country's gross domestic product grew at a rate of about 0.6 percent, slowing from 1.0 percent in the third quarter, according to seasonally adjusted data from national statistics agency INEGI.

Compared with the fourth quarter of 2015, GDP expanded at an annual rate of 2.2 percent, the preliminary data showed, which would mean the economy grew nearly 2.3 percent in 2016, Reuters calculated.

That is above 2.1 percent growth projected in a Banamex poll on Jan. 20 and below the 2.6 percent rate of 2015.

According to INEGI's initial estimates on Tuesday, the industrial sector did not expand in the fourth quarter from the third. Weak demand in the United States for Mexican-made goods has weighed on factory output.

Economists have slashed their outlook for growth this year to 1.5 percent, according to the Banamex poll, due to risks that U.S. President Donald Trump's policies could crimp trade with Latin America's second-largest economy and hit investments.

The data showed Mexico's agricultural sector grew 0.4 percent in the fourth quarter from the third. Services expanded 0.7 percent, down sharply from a revised 1.4 percent quarterly rate in the third quarter.

Final data will be published on Feb. 22.

(Reporting by Michael O'Boyle; Editing by Paul Simao and Lisa Von Ahn)

 

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