MEXICO CITY (Reuters) – The outlook for Mexico’s economy is improving after stronger factory exports in the first quarter and a more optimistic tone on trade talks with the United States, a top finance ministry official said on Monday.

Finance Ministry Chief Economist Luis Madrazo said Mexico’s exports, excluding oil which has been hit by lower production by state-run oil company Pemex, grew 9.2 percent in the first quarter from a year earlier, the strongest pace in more than two years.

“(Factory) exports are now firing on all cylinders, and that is very good for Mexico,” Madrazo told Reuters in a telephone interview.

Mexico exports mostly manufacturing goods, compared to other Latin American economies that produce more raw materials, and it sends nearly 80 percent of its exports to the United States.

The finance ministry revised its official 2017 growth estimate upward on Monday to a range of 1.5 percent to 2.5 percent after data showed the economy was so far shrugging off fears U.S. President Donald Trump’s policies would hit exports and investment.

“The strength and resilience shown by the Mexican economy in the first trimester sharply reduces the likelihood of a slowdown in the second and third trimester,” Madrazo said.

Private sector economists have been revising up their outlook for Mexican growth since the Trump administration began to take a more constructive tone on talks to renegotiate the North American Free Trade Agreement.

Credit rating agency Moody’s late last month affirmed its A3 rating on Mexico’s government debt, but maintained a negative outlook due to lingering risks to Mexico’s economy from new U.S. tariffs under NAFTA revisions.

But Madrazo said the outlook for trade talks had improved since then, following last week’s letter from the Trump administration to the U.S. Congress that puts the countries on track to start talks on NAFTA around mid-August.

“Last week’s notification to Congress gives us a clear, credible signal that we are on the right track with trade negotiations and that should diminish risks from U.S. policy and should be credit positive,” Madrazo said.

(Reporting by Michael O’Boyle; Editing by Jacqueline Wong)