March 14, 2013
Chicago Tribune, 3/14/2013
Mexico’s peso is scaling new highs amid confidence in the country’s reform push, a likely credit ratings upgrade and profit taking after last week’s interest rate cut, sparking speculation about how far it will rise before authorities act. The peso has gained 2.6 percent since the start of the month, the best performance of the 152 currencies tracked by Thomson Reuters, and broken through key levels of 12.50 per dollar for the first time in 18 months.
The rise has come despite a 50 basis point cut in benchmark interest rates to a record low 4 percent on Friday, which only served to fuel investor optimism about the outlook for Latin America’s No. 2 economy.
November 6, 2012
Mexican central bank Governor Agustin Carstens said that the benefits of a fiscal overhaul raising taxes, as Mexico’s incoming president is expected to propose, would outweigh any short-term inflation increase.
“What we know about tax reforms worldwide, when they are implemented they have a once-and-for-all impact on CPI, but then the effect on inflation gets diluted,” Carstens said yesterday in an interview in Mexico City following the conclusion of Group of 20 meetings. Carstens said increasing government revenue would provide “a much stronger basis for stronger growth” and help limit inflation in the “medium and long term.”
February 2, 2010
Financial Times, 2/2/2010
The new head of Mexico’s central bank has promised closer co-operation with the government will underpin his six-year tenure, a move likely to heighten investor concerns about his institution’s independence.
Agustín Carstens, who took over as Bank of Mexico governor at the start of this year, told the Financial Times in an interview there was “huge scope for constructive interaction” with the centre-right administration of Felipe Calderón, president.
Such comments risk unnerving investors, who fear his close links to Mr Calderón could make the bank more susceptible to political pressure.
Mr Carstens said investor concerns were unfounded. “There is no reason to worry; the only thing that both the president and the Banco de Mexico under my leadership are trying to do is to exploit those synergies that are possible.”
December 11, 2009
Dec. 10 (Bloomberg) — Mexican President Felipe Calderon’s decision to appoint Social Development Minister Ernesto Cordero as finance minister may hinder the government’s ability to push through reforms, according to Barclays Capital.
Cordero, 41, may struggle to persuade Congress to pass laws, Barclays analysts Roberto Melzi and Jimena Zuniga said. Fitch Ratings last month cut Mexico’s rating to BBB, the second- lowest investment grade, citing a need for fiscal changes. Standard & Poor’s may decide on whether to lower it this month.
October 7, 2009
Oct. 7 (Bloomberg) — Mexico’s peso gained for a fourth day as lawmakers from the Institutional Revolutionary Party said they will seek “more aggressive” spending cuts than President Felipe Calderon proposed in his 2010 budget plan.
The currency rose 0.8 percent to 13.3683 per U.S. dollar at 5 p.m. New York time, from 13.4674 yesterday. The peso has gained 3 percent in the past four days.
September 15, 2009
Sept. 15 (Bloomberg) — Mexican lawmakers criticized President Felipe Calderon’s tax and spending proposals for next year, saying they unfairly punish the poor while doing nothing to close business tax loopholes.
Legislators from the Institutional Revolutionary Party, the largest in the lower house, said the government’s plan to apply a 2 percent sales tax to all products should be scrapped in favor of making sure businesses pay their fair share of taxes. Calderon needs the PRI’s backing to win approval for his bill.
May 21, 2009
Wall Street Journal, 5/21/2009
Mexico’s economy shrank 5.9% in the first quarter from the fourth quarter of last year — showing the economy in its steepest decline since the depths of the country’s 1995 peso crisis. That translates to an annualized quarter-on-quarter drop of 21.5%. Compared to a year ago, gross domestic product fell by 8.2%, the country’s statistics office said on Wednesday.
The worst may not be over for Mexico, which faces a dramatic fall in tourism because of the recent outbreak of A/H1N1 flu, on top of slumping demand from the U.S. Mexican Finance Minister Agustin Carstens on Wednesday revised down the government’s forecast for full-year GDP to a contraction of 5.5% from the previous 4.1%.
Mexico during the past 15 years has depended in large part on demand for goods from a supercharged U.S. economy. About a fifth of Mexico’s economy depends on manufacturing exports to its neighbor, and the dramatic drop in demand has hit Mexico hard.
May 8, 2009
Financial Times, 5/8/2009
Mexico is studying plans to introduce a wide-ranging tax reform, possibly as early as next year, that would increase taxes and allow the government to abandon its strict spending limitations during difficult times.
In a press conference on Thursday, Agustín Carstens, the finance minister, told a small group of foreign media that the country had to continue gradually increasing income from non-oil sources. “We have to start that process next year,” he said.
At the same time, the government was considering abandoning its current “zero-deficit” law in favour of one linked to the country’s economic cycle. While stressing the need for accumulating surpluses during the good times, Mr Carstens said that such a change would allow for greater spending flexibility in periods of low or negative growth.
A presentation by Gary Hufbauer and Barbara Kotschwar at the Peterson Institute of International Economics provides more background on the economic situation in Mexico.
April 27, 2009
Mexico’s outbreak of deadly swine flu may curtail tourism and compel shoppers to stay home, further damaging an economy already reeling because of a U.S. recession that has cut demand for exports.
President Felipe Calderon closed Mexico City schools until May 6, shut public events and declared emergency powers to order quarantines to fight the flu, which has killed as many as 103 in Mexico. Finance Minister Agustin Carstens said there’s “high potential” the outbreak will disrupt the economy, with hotels and restaurants being the hardest hit.
April 26, 2009
Finance Minister Agustin Carstens
Finance ministers from both wealthy and developing nations have called for an urgent reform of banking systems in developed countries.
A meeting of the World Bank and the International Monetary Fund (IMF) in Washington said such measures were needed for global economic recovery.
The head of the IMF said progress had been made but it had been too slow.