Mexico's central bank has lowered its forecast for the country's 2015 economic growth.

The Bank of Mexico is now predicting GDP will expand between 1.7 percent and 2.5 percent. That's down from earlier forecasts of 2 percent to 3 percent.

Bank chief Agustin Carstens said Wednesday that conditions point to "a low index of growth in economic activity."

On the positive side, he said inflation is seen as below 3 percent.

Mexico's economy and national budget have been hit by slumping oil prices. Petroleum revenue accounts for about a third of government spending.

The Mexican peso has also fallen against the U.S. dollar for nearly a year, prompting the central bank to auction off reserves to slow the currency's slide.