Mexico's economy, the second largest in Latin America, shrank in the second quarter compared to the previous three months, the first quarterly contraction since the 2009 global financial crisis.
The national statistics institute on Tuesday said the economy contracted by 0.74 per cent in the April to June period due to a drop in services and industrial sectors such as manufacturing, mining and construction.
On a year-on-year comparison, Mexico's economy grew by 1.5 per cent in the second quarter, a figure well below analysts' forecasts.
The statistics agency, INEGI, said the figures were based on a new methodology that follows international recommendations.
Mexico has recovered from a deep recession in 2009 that was sparked by the US financial crisis, and its economy grew by 3.9 per cent last year.
But the government and central bank have cut their 2013 growth forecasts due to the disappointing start of the year.
The finance ministry now expects the economy -- second to Brazil in Latin America -- to grow by 3.1 per cent this year instead of 3.5 per cent while the central bank has a more conservative forecast of between 2.0 and 3.0 per cent.
