The Mexican government plans to bring in a 17.4 billion peso ($1.54 billion Cdn) stimulus package aimed at supporting the tourism industry and the small business sector, Finance Minister Agustin Carstens said Tuesday.

Health insurance premiums will be temporarily cut for small firms, while airlines and cruise ships will see their taxes cut.

Mexican hotel occupancy rates have been cut in half in the wake of the outbreak of swine flu, while many airlines have cancelled flights to the country. The outbreak, which has its roots in Mexico, has led the World Health Organization to raise its global pandemic alert level to five on a scale that tops out at six.

The Mexican economy has lost the equivalent of $2.59 billion Cdn due to the swine flu outbreak, the finance minister said.

The fallout from the outbreak will cut between 0.3 and 0.5 percentage points from the country's economic performance this year, Carstens said. The economy could contract by four per cent in 2009, he has said.

Last week, Carstens said the Mexican economy likely contracted in the first quarter by seven per cent year-over-year due to falling exports. The United States is the destination of about 80 per cent of Mexico's exports.