January 24, 2014
Mexico’s Finance Minister Luis Videgaray said there is no need to support the peso, which has fallen to its weakest in 18 months, because the market remains sufficiently liquid.
“The Mexican peso market is, fortunately, highly liquid and at the moment doesn’t require any support,” Videgaray said in an interview at the World Economic Forum in Davos, Switzerland. “We have a very liquid market and we don’t see the need to inject liquidity, to intervene.”
January 17, 2014
In Latin America, this looks to be the year of Brazil — thanks to the impending World Cup and presidential elections. But with another lackluster year looming in emerging markets, fans of transformation, growth and investment potential should instead look to Mexico.
Brazil’s president, Dilma Rousseff, is expected to win a second term this year, and its soccer team stands a good shot at victory. But growth has slowed considerably. In the world’s seventh largest economy, reforms are stagnating and the country faces a possible ratings downgrade.
Mexico, by contrast, is in the throes of serious reforms. It will likely lead Latin America with at least 4 percent growth this year and an improving investment outlook. Standard & Poor’s recently boosted Mexico’s credit ratings because of energy reforms that the rating company trumpeted last month as a “watershed moment” for the country. It is becoming a story of inverted fortunes, as Michael Shifter and Cameron Combs of the Inter-American Dialogue recently wrote.
January 10, 2014
Mexico Institute Director Duncan Wood and Associate Christopher Wilson responded to the U.S. Department of Commerce Federal Register Notice published on November 25, 2013, which requested stakeholder input on the U.S.‐Mexico High Level Economic Dialogue (HLED)
In their comments, they noted that Mexico and the United States share an economic space and an economic future, and that the HLED is an important and potentially fruitful element in moving that future forward and maximizing the benefits for both countries. They stated that it should be both consolidated through high‐level engagement and institutionalization, and broadened to include a greater dialogue with the private sector and civil society and an expanded focus on border affairs.
Read their testimony here.
December 9, 2013
Mexican inflation picked up less than expected in November on a spike in fresh food and electricity costs and muted underlying price pressures boded for steady borrowing costs through next year.
Inflation in the 12 months through November rose to 3.62 percent, the national statistics agency said on Monday.
December 6, 2013
Three years into her home-ownership dream, Martha Orozco has had enough. Stuck in a government-sponsored complex called Parque San Mateo that’s two hours away from her $8,000-a-year job as a hospital secretary in Mexico City, Orozco sees only broken promises and blight all around her.
The program has been a disaster. Hundreds of thousands of homes are now derelict after buyers such as Orozco concluded they were located too far from city centers and moved out. Developers, their profits assured by government guarantees, built houses faster than municipalities could connect them to water systems and power grids.
December 4, 2013
Global oil majors from Exxon Mobil Corp. to Chevron Corp. are about to get the clearest indication yet of how far Mexican lawmakers will go to lure them into the largest unexplored crude area after the Artic Circle.
Senate committees will begin debating a bill to end a seven-decade state oil monopoly as soon as today. On the agenda is a proposal by members of President Enrique Pena Nieto’s Institutional Revolutionary Party, or PRI, and the National Action Party, or PAN, to extend a profit-sharing model unveiled in August by also allowing production sharing or a license model used in Brazil, said two people with knowledge of the talks.
November 27, 2013
Mexico’s recent tax overhaul does not do enough to curb the government’s dependence on oil revenue while other major reforms may not boost economic growth as much as authorities forecast, the International Monetary Fund said on Tuesday.
“With the prospect of declining oil production over the next decade, the federal government needs to beef up its collection on non-oil revenues,” the IMF said in a report on the fiscal reform that accompanied its so-called Article IV consultation with Mexican authorities.
November 27, 2013
The Christian Science Monitor, 11/26/2013
President Peña Nieto’s sweeping reforms raise taxes on US-owned companies and other businesses. Some firms along the US-Mexico border say they won’t rule out relocating.
November 26, 2013
The Financial Times, 11/25/2013
Mexico may be all the rage among investors. But praise the country in polite Mexican society and you risk running a gauntlet of abuse. John Authers, the FT’s investment columnist and a former Mexico bureau chief, describes the situation very well.
Certainly, President Pena Nieto’s reform agenda gets high marks for concept but low marks for delivery. Of his four biggest initiatives, the detail of telecom reform is still being worked out; ditto education; the fiscal reform was disappointing; and we don’t yet know the full shape of the energy reform. No wonder the understandable skepticism, then, of much local conversation – even if the intensity of that conversation has meant missing another problem that has not won the discussion it deserves.
November 26, 2013
Since President Enrique Peña Nieto took office last December, Mexico has embarked on a flurry of structural reforms in areas as varied as telecommunications, education, taxes and the country’s national oil industry.
Yet the one reform likely to have the most immediate positive economic effect has gone relatively unheralded: bank lending reform, which the Mexican Senate is about to approve. Although moves to open the oil industry represent a revolutionary shift, their impact on increased production might not be felt for years. Likewise, higher taxes on firms and individuals resulting from Mexico’s much-needed fiscal overhaul might well slow the Mexican economy in the short run. But by making it easier to extend credit to small and medium enterprises and low-income families, Pena Nieto’s lending reforms could boost the economy as early as next year.