Mexican economy seen shrinking in second quarter on weak industrial output

Mexico's economy likely shrank in the second quarter, with a stagnant service sector and a drop in industrial output contributing to the decline.

Mexico will report quarterly gross domestic product (GDP) data on Monday, and according to the median responses of five economists polled by Reuters, seasonally adjusted GDP likely contracted by 0.3 percent from the first quarter.

The economy grew 0.8 percent in the first quarter.

Compared with the second quarter of 2015, the economists saw GDP expanding 2.40 percent. Growth was 2.6 percent in the first quarter versus the year-ago period.

According to preliminary data released by national statistics agency (INEGI) at the end of last month, seasonally adjusted GDP contracted by about 0.3 percent from the prior quarter.

According to INEGI's initial estimates, the industrial sector contracted by 1.7 percent from the January-March period, which, if confirmed, would be its worst showing since the first quarter of 2009.

Weak demand in the United States for Mexican-made goods has weighed on Latin America's second biggest economy.

Mexico's services sector posted flat growth while agricultural output dipped 0.1 percent, the data showed.