IMF urges Mexico to undertake further tax reform

November 27, 2013

Reuters, 11/26/2013

imfMexico’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.

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Mexico’s economic potential, slowdown “exaggerated” – IMF official

October 31, 2013

pesos5Reuters, 10/31/2013

While Mexico’s economy was overly hyped in the early months of this year, so too are reports of the slowing of Latin America’s No. 2 economy, a senior International Monetary Fund (IMF) official told a local newspaper on Thursday.

“(Mexico’s potential) was clearly exaggerated in January, February and March, but on the other hand, perhaps now, so is (the deceleration),” Alejandro Werner, director of the IMF’s western hemisphere department, said in an interview with daily Reforma, referring to glowing reports of Mexico’s economic scope in the English language press.

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IMF cuts Mexico’s growth outlook, sees modest boost from reforms

October 8, 2013

imfReuters, 10/08/2013

The International Monetary Fund slashed its 2013 growth outlook for Mexico on Tuesday after a weaker-than-expected first part of the year, while it dialed back expectations for growth in Brazil next year.

The IMF said Mexico’s gross domestic product (GDP) would grow 1.2 percent this year, down from a 2.9 percent expansion it forecast in July, due to low government spending, a drop in construction and slack U.S. demand for local exports.

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IMF Names Mexico’s Werner Head of Western Hemisphere Office

November 6, 2012

Bloomberg Business week,11/6/2012

The International Monetary Fund chose former Mexican Deputy Finance Minister Alejandro Werner to head its Western Hemisphere department overseeing Latin America.

Werner will take up his post in early January, according to a statement released via e-mail by the IMF today. Currently head of corporate and investment banking at Mexico City-based BBVA Bancomer SA, Werner helped steer Latin America’s second-biggest economy through its deepest recession in almost two decades in 2009 without fueling a surge in the fiscal deficit.

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Give Mexico A Chance

July 17, 2012

Foreign Policy, Robert Looney, 7/16/12

Just when everyone seemed ready to throw in the towel, the economy is showing signs of fulfilling its potential. Mexico grew by 4.0 percent in 2011, and the IMF is forecasting gains of 3.6 percent for 2012 — hardly stellar for an emerging-market economy, but better than Brazil, with corresponding rates of 2.7 percent and 3.0 percent. What’s more, Mexico has managed to grow in spite of the surge of drug-related violence in key industrial zones…

It’s tempting to attribute Brazil’s economic successes and Mexico’s lackluster performance to their respective approaches to economic policy. Mexico has worked doggedly to implement the neo-liberal Washington Consensus approach to macroeconomic management — budget discipline, central bank independence, anti-inflationary monetary policy, and pro-market liberalization, including the development of a truly private banking system. In contrast, Brazil has mixed market neo-liberalism with an eclectic, proactive approach to economic policy; its “heterodox” features include a large, partially state-owned banking system with complex, discriminatory rules for credit allocation, and reliance on a witch’s brew of state-led investment strategies aimed at eliminating infrastructure bottlenecks…

While it is fashionable in some quarters to attribute Brazil’s higher growth rates to the country’s pragmatic approach to economic management and Mexico’s adherence to the neo-liberal gospel, I believe Mexico’s economic performance is largely a product of the demand for Mexican products by the U.S. The numbers certainly support this view: The IMF found a high correlation between Mexican exports and GDP, with changes in exports statistically accounting for 86 percent of the variations in the country’s growth rate between 1996 and 2010.

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Bank of Mexico helps boost IMF emergency funds

June 22, 2012

Fox News Latino/EFE, 6/21/2012

The Bank of Mexico said it offered a $10 billion bilateral loan to the International Monetary Fund as part of the international effort to bolster the multilateral financial institution’s reserves.

A total of 37 IMF members are contributing to the effort to help stabilize the global economy and promote growth, the Bank of Mexico said.

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Mexico to push for more IMF funding at G20 summit

June 13, 2012

Bloomberg Business Week, 6/12/2012

President Calderon

Mexico will use the impending G-20 summit to push the world’s largest economies to increase the resources of the International Monetary Fund and build confidence in the fund’s ability to help European countries shaken by financial crisis, President Felipe Calderon said Tuesday.

“Mexico is seeking the adoption of a plan of integrated, comprehensive, long-term action that will go include, and go beyond, measures to confront and resolve the European crisis,” Calderon said.

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Mexico sees good progress on G20 IMF funding

April 18, 2012

Reuters, 4/18/12

Promises by countries including Japan and Sweden to boost funding to the International Monetary Fund show good progress towards a Group of 20 deal, Mexican Finance Minister Jose Antonio Meade said on Wednesday.

Meade will chair meetings of the bloc of advanced and developing nations in Washington on Friday where policymakers will discuss boosting the IMF’s financial firepower, an issue that has taken on fresh urgency given a jump in borrowing costs in Spain and Italy this week.

Japan, Sweden and Denmark have already committed a total of $77 billion to help contain the euro zone’s debt crisis and Meade said this was a positive sign for Friday’s talks.

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Mexican Senate approves 145.8% increase in the country’s IMF quota [In Spanish]

March 5, 2012

Infolatam, 3/4/2012

With 71 votes in favor, the Senate of Mexico approved the proposal issued by President Calderón to raise the country’s quota in the International Monetary Fund (IMF) by 145.8 percent. This translates into an annual quota of 3.625 billion special drawing rights (SDRs) that will now increase to an annual quota of 8.912 SDRs.

This increase in resources dedicated to the financial institution will allow the country to “have a greater influence in the decision-making of the IMF governing bodies,” according to a statement made by the panista José Trejo, president of the Treasury Commission of the Senate, during debate.

“Today we have to commit to an extra contribution to the IMF because the moment has come to join ourselves to the new architecture of international finance so that it may generate development, employment, and world hope,” expressed PRI senator Rosario Green in support of this decision.
On the other hand, senators from the left voted against increasing this contribution to the IMF considering that the goal of such increase is to “rescue developed countries.”
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Is violence in Mexico affecting foreign investment? No, say recent reports.

August 8, 2011

Christian Science Monitor, 8/8/11

Recent reports out of Mexico describe violent border states as lands of economic opportunity, despite the car bombs and dead bodies hanging from pedestrian bridges.

One government report last month showed that seven states where most drug-related murders take place are receiving greater percentages of the country’s Foreign Direct Investment (FDI) than they were before the drug war began in 2006.

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