June 18, 2013
Mexico’s economic growth will quicken as the government increases spending in the second half of the year, Finance Minister Luis Videgaray said. The economy grew at the slowest pace in more than three years in the first quarter after spending was contained after a new government took over in December, Videgaray said in an interview in London. President Enrique Pena Nieto took office on Dec. 1.
Investor confidence in Mexico has waned after the economy expanded less than analysts expected in the first quarter and government plans to overhaul the state-controlled oil industry were held up. Capital flows also have slowed on signs the U.S. Federal Reserve could scale back asset purchases as economic growth strengthens. “We expect much more accelerated spending in the second semester,” Videgaray said. “The budget is there and the revenue is there.” Mexico’s government spending fell about 7 percent in real terms to 1.16 trillion pesos, or $90 billion, in the first four months of 2013 compared to the year-earlier period, according to data from the central bank.
June 17, 2013
Federal Reserve Bank of Dallas, Second Quarter 2013
Mexico’s sharp first-quarter slowdown isn’t entirely surprising. While the country has made considerable economic advances in recent years, its growth is closely tied to that of its northern neighbor, and the U.S. economy stalled at year-end. Some Mexico indicators, such as industrial production, have been flat since mid-2012. The lackluster performance, although a cause for concern, gives impetus to the efforts of Mexico’s new president, Enrique Peña Nieto, who in his first months has worked with the nation’s major political parties to achieve labor, education and telecommunications reforms. Judicial, banking and energy industry changes are in the works.
The Pact for Mexico represents the latest attempt over a three-decade span to achieve reforms and propel the nation forward. The challenges Mexico confronts as it seeks to become a leader among emerging economies were considered at a Federal Reserve Bank of Dallas conference, “México: How to Tap Progress,” last fall in Houston. The meeting explored why economic expansion in Mexico has barely kept up with population growth and why the nation’s per capita income growth has trailed that of emerging-market economies such as Brazil and Chile.
June 6, 2013
The Huffington Post, 6/6/2013
With all the hype Mexico’s “booming” economy has been garnering over the past, it may have come like a dousing of iced water to see GDP growth screech to a halt during the first quarter of the year, the first full quarter under the administration of Enrique Peña Nieto. At first glance, the figures looked grim: year on year growth was a meagre 0.8%, the weakest since the 2009 recession, and far below the 3-5% rates Mexico watchers had been accustomed to over the past three years. Fortunately, behind this number was a statistical anomaly in that the Easter break fell in March rather than April, thereby knocking off a few days of activity when making the year on year comparison. However, a calendar adjustment showed that growth was still sluggish at 2.2%, a number which looked more fitting for the gloomy past decade than in the roaring era of the “Aztec tiger.”
Since then, there’s been a slight reversal in the tone about Mexico. After a smooth ride since 2010, it has now dawned on many of the formerly excited observers that there are some bumps on the road to prosperity. For all these recent jitters, it certainly doesn’t appear like the fiesta is over. There are still questions, however, over just how bombastic it will turn out.
May 30, 2013
The Monitor, 5/29/2013
As the Congress debates immigration reform legislation, millions of tourists and billions of dollars continue to cross the U.S.-Mexico border in both directions. A study released earlier this month by NDN, a center-left think-tank based in Washington, D.C., shows trade and tourism between the two countries is at an all-time high. Trade between the two nations in 2012 was estimated at $535 billion. That number is up from $300 billion in 2009, a number that’s projected to double by this year, said Simon Rosenberg, the president of NDN.
Texas leads all states with almost $200 billion in imports and exports with Mexico. Trade with Mexico sustains almost 6 million U.S. jobs, the NDN study said. In the Rio Grande Valley, tourists provide the biggest Mexican boost to the economy. “We really rely heavily on the Mexican market,” said Nancy Millar, the director of the McAllen Chamber of Commerce’s Convention and Visitors Bureau.
May 29, 2013
The majority of foreign and domestic companies in Mexico say security has either improved or remained unchanged from last year, and almost half expect more improvement within five years, according to a survey released on Tuesday. In the survey conducted by the American Chamber of Commerce of Mexico, 42 percent of the 531 respondents said the security situation had improved. “We attribute this mainly to the actions of the federal authorities and the measures undertaken by the companies themselves,” said Thomas Gillen, president of the chamber’s security committee, who presented the findings.
Forty-two percent of respondents said the security situation had not changed and 13 percent said security had deteriorated. More than half of the latter group cited corruption as the cause of the deterioration. Foreign investment in Mexico rose to a six-year high in the first quarter of this year, Mexico’s Economy Ministry said earlier this month, with foreigners pouring $4.99 billion into Latin America’s No. 2 economy as they tried to gain a foothold in its booming manufacturing sector.
May 17, 2013
Financial Times, 5/16/2013
Over the past few years, officials at Mexico’s national statistics agency have become used to publishing the glowing quarterly economic growth figures that have plotted the country’s recovery since the financial crisis. But on Friday, the statisticians will probably show the world a very different set of numbers – one that, if economists have their estimates right, will confirm the worst year-on-year quarterly result since the 2009 recession. Some even suggest that it might be negative.
Could it be that Mexico’s rebound, which has helped Latin America’s second-largest economy emerge from Brazil’s shadow into full view of international investors, is coming to an end?
May 16, 2013
MSN Now, 5/15/2013
Mexico outsourcing jobs to America? No, it’s not a headline from The Onion, it’s really happening. Mexican baking company Groupo Bimbo’s Mexico City factory was completely overwhelmed by American appetites for its tasty treats, especially among the fast-growing Hispanic population, who are hungry for the taste of home. But instead of opening another Mexico-based kitchen, it headed across the border to set up shop. So far the baked goods behemoth has opened 80 plants in the U.S., hiring around 40,000 American workers to make everything from Bimbo Panque con Nuez (Pecan Pound Cake) to Barcel Takis Guacamole. So much for those authentic Mexican-made guacamole-flavored tortilla chips — these snacks are made in America.
May 13, 2013
Photo: Guillermo Arias
Mexico is the United States’ third largest trading partner, after Canada and China, in terms of total trade in goods, while the U.S. is Mexico’s largest trading partner. As such, the economic ties of the U.S. and Mexico are significantly important to the economy and society in both countries.
Further, the U.S.-Mexico border is not a static line drawn on a map, but a dynamic and ever-evolving place along which substantial daily interaction takes place. Yet the resounding refrain we repeatedly hear from some members of Congress is that building a 1,969-mile fence to separate us from one of our largest economic partners, and the eleventh largest economy in the world, is a key component to solving the issues presented by an outdated immigration system and a requirement that must be completed before moving forward with proposed immigration reforms. To be clear, there is a need for secure borders, but there is also a need for further streamlining and efficiently facilitating the daily cross-border flows of people, goods and services important to the bi-national economic relationship of the United States and Mexico — an economic relationship the following facts highlight.
May 8, 2013
The Wall Street Journal, 5/7/2013
Mexico’s government and opposition leaders signed an agreement Tuesday to prevent the use of federal antipoverty programs in support of candidates in coming local elections, a condition demanded by the opposition to continue backing the reform agenda of President Enrique Pena Nieto. The deal, signed at a public event at the National Palace, promises to end a political dispute that in recent weeks threatened to derail the so-called Pact for Mexico, an unprecedented accord between the government and opposition to secure legislative support for key economic and structural overhauls.
Tuesday’s agreement was added to the pact, a 34-page document outlining 95 commitments to bolster Mexico’s competitiveness, agreed in December by Mr. Pena Nieto, the conservative National Action Party, or PAN, and the leftist Party of the Democratic Revolution, or PRD. The Congress has already passed overhauls of the education and telecommunications sectors drawn up under the pact, raising expectations among Mexicans and foreign investors that the country can approve long-postponed reforms. A financial sector proposal to bring about more and cheaper bank lending, postponed in late April due to the political dispute, is now expected to be presented as early as Wednesday.