Mexico slashed its 2014 growth forecast from 3.9 percent to 2.7 percent Friday after a weak first-quarter performance linked to new taxes and an economic freeze in the United States.
The government revised its outlook after the national statistics agency reported 1.8 percent growth in the first quarter compared to the same period last year, a weaker-than-expected result.
The finance ministry acknowledged that tax hikes on items such as junk food and sodas, part of a fiscal reform that came into force this year, put a damper on growth.
But Deputy Finance Minister Fernando Aportela said the effects of the new taxes were only "transitory" and that growth would speed up in the next three quarters of the year.
The central bank had cut its own annual growth forecast on Wednesday to a range of 2.3-3.3 percent in Latin America's second biggest economy.
Aportela said the disappointing performance was also due to slow first-quarter growth in the neighboring United States, Mexico's top trade partner.
Mexico's economic fate is closely linked to what happens in the United States, which posted just 0.1 percent growth in the first quarter following severe winter weather.
The Mexican economy performed weakly last year, posting 1.1 percent growth, much lower than initial forecasts of 3.5 percent.
But Finance Minister Luis Videgaray was upbeat on Wednesday, saying a slew of reforms that include overhauls of the telecommunications and energy sectors would lead to growth of five percent as soon as next year.