Mexico's government sharply lowered its growth forecast for this year on Thursday after the economy grew by a meager 0.4 percent in the first quarter, hit by slumping oil prices.

The finance ministry said it expected Latin America's second biggest economy to expand by between 2.2 and 3.2 percent in 2015, compared to a previous forecast of 3.2 to 4.2 percent.

The announcement came shortly after the national statistics institute posted the disappointing first quarter growth figure of 0.4 percent compared to the previous three months.

On an annual comparison, the economy grew by 2.5 percent between January and March compared to the same period last year.

The central bank cut had already Mexico's growth forecast on Tuesday, citing a drop in oil production and low external demand due to weak growth in the neighboring United States.

The bank said it now expects the economy to grow in a range between 2.0 and 3.0 percent, down from a previous forecast of 2.5 percent to 3.5 percent.