The Mexican city of Guadalajara has announced it has withdrawn as host of the 2017 world swimming championships because of financial problems caused by falling oil prices.

Guadalajara organizers said they could no longer afford to stage the two-week event, which costs around $100 million, after the Mexican government cut its 2015 budget by nearly three percent as slumping crude oil prices pressure public finances.

The government relies on oil revenue to fund about a third of its budget.

Guadalajara's withdrawal came just after the Canadian city of Edmonton pulled out of the race to stage the 2022 Commonwealth Games, also citing the drop in oil prices.

Jesus Mena, the director of the Mexican National Commission for Physical Culture and Sport, said in a statement he had broken the news to swimming's world governing body.

"After reviewing the budget, we have determined that we must inform FINA that Mexico cannot host the world championships," Mena said.

Mena said the city had already spent $9.5 million preparing for the championships and may have to pay a $5 million fine to FINA for pulling the plug.

Guadalajara was awarded the championships in 2011 after FINA picked the 2015 and 2017 hosts simultaneously. The Russian sports city of Kazan was awarded 2015 while Hong Kong missed out on both. FINA has since awarded 2019 to Gwangju, South Korea and 2021 to Budapest but has not yet said who will replace Guadalajara.

This is the second time the host of swimming's showcase event has dropped out. Dubai was selected for the 2013 world championships but withdrew and was replaced by Barcelona, Spain.