Mexico economy slowing, to grow at 4.5 pct in 2006

Mexico's economy is slowing down as demand from the United States eases but it will still end the year with a growth rate of 4.5 percent, its fastest since 2000, the central bank said on Monday. The growth estimate by the bank's deputy governor, Everardo Elizondo, was at the top end of a previously forecast range of between 4 and 4.5 percent.

The economy has sped along this year on the back of a strong U.S. economy, but a feared slowdown north of the border is expected to put the brakes on Mexico's growth. Mexico's auto exports to the United States, as well as a low-cost housing boom, have fueled the economy this year and Elizondo warned of clouds gathering.

"There are some signs of a slowdown in the near future, partly associated with the normalization of the auto industry's expansion and also the fact that the U.S. economy, although it keeps growing, is probably not growing at the same speed as we have seen in the recent past," Elizondo said.

In a speech in the northern city of Monterrey, the central banker said the economy would grow 3.9 percent in the third quarter and then ease off to 3.7 percent expansion between October and December. That is weaker than the robust growth of 5.1 percent seen in the first half of the year.

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