Mexico's economy is expected to shrink almost 8 percent in the first quarter of this year, putting it on track for its biggest annual contraction since 1995, analysts said Wednesday. Economists at Banamex, one of Mexico's biggest banks, are forecasting a 7.7 percent contraction compared to the same quarter of last year. However, the forecast does not account for the economic impact of swine flu, which stalled commerce and halted tourism since April. The biggest factor in Mexico's economic contraction was not the influenza outbreak but rather the U.S. recession, which has lowered demand for Mexican exports and reduced the money being sent home by Mexicans working in the United States, the analysts said. Finance Minister Agustin Carstens has said that by the end of the year, the economy will have shrunk 4.1 percent. Banamex analysts were less optimistic, predicting a 5.2 percent contraction.
