MEXICO CITY (Reuters) - Raging drug gang violence
in Mexico is slicing about 1.2 percentage points off Mexico's
gross domestic product, the country's finance minister said
Wednesday.

"It has an impact for the government and for companies,"
Finance Minister Ernesto Cordero said at a news conference. "It
is bound to have an impact in terms of additional costs for
companies and this is why it is so important to fight organized
crime in Mexico in a more effective and timely way."

Drug murders have soared since President Felipe Calderon
declared war on cartels on taking power in December 2006.

Turf wars, battles with security forces and targeted
killings have left 28,000 people dead since then, and 2010 has
seen a spurt in slayings including shootings in bars and the
murders of town mayors and a gubernatorial candidate.

A growing worry for foreign investors, the U.S. government
and foreign tourists, the death toll is worsening as Mexico is
also struggling to get its economy back up to speed after the
global economic crisis knocked it into a severe recession.

"Organized crime in Mexico has an impact on the growth rate
of gross domestic product of close to 1.2 points of GDP,"
Cordero said.

Cordero reiterated that Mexico's economy is expected to
grow 4 percent to 5 percent this year, not enough to make up
for a 6.5 percent contraction in 2009.

Some analysts say the drug war may prompt investors to put
projects on hold or eventually weigh on Mexico's currency.

In early 2009, Central Bank Governor Agustin Carstens, who
was then finance minister, said Mexico's economy could grow by
an extra percentage point if the country could resolve its
security issues.
(Reporting by Luis Rojas; Writing by Catherine Bremer; Editing
by Bill Trott)