MEXICO CITY—Mexico's Treasury Department says the peso will end the year with an average exchange rate of around 12.5 to $1, following recent gains.

The department had originally predicted an average rate of 12.9 to $1 when it drew up the 2013 budget last year, but the peso has gained against the U.S. dollar.

The exchange rate stood at 12.34 to $1 Monday.

The department said it is estimating economic growth of 4 percent for 2014, a bit above the projected 3.5 percent growth rate for 2013.

It also predicted continued strength for the Mexican currency in 2014, with an average exchange rate of 12.6 to $1.


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