Mexico’s new Finance Minister Arturo Herrera said on Tuesday that he does not see an impending recession, despite a contraction in Latin America’s second-largest economy during the first quarter and analysts’ expectations of further weakness.

“I don’t see a recession around the corner … I see that there has been a slowdown on a global level but we are very, very far from thinking that we are close to a recession,” Herrera told reporters, in his first press conference since being named finance minister.

His predecessor Carlos Urzua resigned on Tuesday with a letter that shocked markets by citing “extremism” in economic policy, before President Andres Manuel Lopez Obrador quickly named well-regarded deputy minister Herrera to replace him.

In Blow to Mexican President, Finance Minister Quits Over Economic ‘Extremism’

In the unusually strongly worded resignation note made public on his Twitter account, Carlos Urzua said the government was forming economic policy without sufficient foundation

Herrera was asked about the risk that Mexico’s economy could slide into a technical recession, meaning two consecutive quarter of economic decline, when the statistics agency publishes gross domestic product data at the end of the month.

The economy shrank in the first quarter 2019, contracting 0.2% compared with the October-December period as services and industrial activity dipped. It was the first contraction since the second quarter of 2018.

“Mexico seems to be virtually in a recession. GDP growth in the fourth quarter last year was barely positive and the economy contracted in the first quarter this year. We estimate that GDP will also contract in the second quarter, putting Mexico in a technical recession,” Bank of America Merrill Lynch said in a recent note to clients.

Ratings agency Moody’s Investors Service has warned that unpredictable policymaking by the Mexican government and challenges facing debt-laden state oil firm Pemex are clouding the economic and fiscal outlook Mexico.

Herrera said the government’s fiscal priorities had not changed, underscoring the administration would prioritize macroeconomic stability, a responsibly manage the country’s public finances and target a primary surplus of 1% of GDP in 2019.

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