The Bank of Mexico cut its growth forecast for Latin America's second-largest economy this year to 0.6%, from 1.2% previously, and said it now expects inflation to take longer to ease to its target of 3.

The Bank of Mexico has halved its growth forecast for the Mexican economy in 2023, with potential for a recession. The growth estimate is now 0.6%, with inflation taking longer to reach its 3.0% target.

The Bank of Mexico on Wednesday halved its growth forecast for the Mexican economy this year and even sees a possibility it will slide into a recession, contracting by as much as 0.2%. It said Latin America's second-largest economy is now forecast to grow just 0.

The central bank cut its benchmark rate to 9.5% from 10% on Feb. 6 as board members noted the economy’s contraction in the fourth quarter and the wild card of U.S. policy.