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.
November 15, 2013
The Wall Street Journal, 11/14/2013
In response to the economic slowdown this year, when gross domestic product is expected to grow just 1.2%, the Congress approved a fiscal deficit for next year equivalent to 3.5% of gross domestic product. This includes financed investment at state oil monopoly Petróleos Mexicanos for 2% of GDP. This year’s deficit is expected to be around 2.4% of GDP.
The infrastructure budget includes significant amounts for roads, ports, railways and water projects, as the government aims to give a boost to the struggling construction sector. Funds have also been earmarked for reconstruction, particularly in the southern state of Guerrero, which was hit hard by tropical storm Manuel in September.
November 8, 2013
Mexico has room for further fiscal reform to improve its tax base because a bill passed by Congress last week still leaves it well behind countries with stronger revenues, credit ratings agency Standard & Poor’s said on Thursday. Mexico’s Congress approved a package of measures last week, including higher taxes for the rich and levies on junk food and stock market gains in a bid to increase the country’s paltry tax take, one of the weakest in the Americas.
Before the tax reform was presented in September, senior officials in President Enrique Pena Nieto’s Institutional Revolutionary Party (PRI) said the aim was to boost revenues by four percent of gross domestic product. But the bill that was eventually floated was less ambitious. And the reform approved is only expected to up the take by around 2.5 percent of GDP by 2018, the finance ministry said.
October 2, 2013
Los Angeles Times, 10/1/2013
Storms and insecurity are further eroding once-optimistic predictions for Mexico’s economic growth, analysts say. Mexico’s economy contracted in the second quarter for the first time in four years. The growth rate is more likely about 1.7%, the government says, or half the prediction of just 10 months ago — and a little less than half of last year’s pace. Some private economists put the current rate even lower.
August 16, 2013
State oil monopoly Pemex would pay income tax on exploration and extraction of oil and gas under new fiscal rules in the government’s proposed energy sector overhaul, Finance Minister Luis Videgaray said in a newspaper column on Thursday.
The proposal unveiled by President Enrique Pena Nieto on Monday calls for the government to open the oil sector to allow private companies to share profits, but not have a stake in crude as many companies had hoped.
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.
May 23, 2013
Mixed signals from the U.S. economy are clouding the growth outlook for Mexico and it needs to be ready for the shocks that could accompany a possible withdrawal of U.S. monetary stimulus, Finance Minister Luis Videgaray said on Wednesday. Mexico’s government last week cut its growth outlook for 2013 to 3.1 percent from 3.5 percent after a soft first quarter, and Videgaray said Latin America’s No. 2 economy has been hurt by weaker U.S. demand for its exports.
“Without a doubt the most important thing is the weakness in the growth of the United States … which still shows mixed signals,” Videgaray told the Reuters Latin America Investment Summit in Mexico City. “We have good data in the United States and the next day we have discouraging data.”
May 7, 2013
Tax breaks for attending “civic values” courses, tax-free sales of second-hand furniture, special treatment for call centers and an informal economy employing six out of 10 workers are all in the line of fire as Mexico prepares a long-awaited tax overhaul. An analysis of budget data shows Mexico’s extensive network of tax breaks and stimulus programs generate costs equal to about half the taxes actually collected.
Mexico has the lowest tax revenue in the 34-nation Organisation for Economic Co-operation and Development, crimping its ability to spend on health, infrastructure and social programs vital to boost living standards and growth in what is Latin America’s second-largest economy. Finance Minister Luis Videgaray has given few details of the overhaul, due to be presented in the autumn session of Congress, but has promised it will be “large,” reviewing both direct and indirect taxes and making those who earn more, pay more.
March 25, 2013
Mexican Finance Minister Luis Videgaray talks about the peso, energy strategy and bank lending. Vidergary speaks with Bloomberg’s Adriana Arai at the Bloomberg Link Mexico Economic Summit in Mexico City.
February 26, 2013
The Wall Street Journal, 2/24/2013
During the 2012 Republican presidential primary, Mitt Romney recommended “self-deportation” for undocumented workers. President Obama seems to be aiming for the same outcome by perpetuating economic malaise. Migrants who can’t find work are likely to go home on their own.
Can newly inaugurated Mexican President Enrique Peña Nieto, of the PRI (Institutional Revolutionary Party), do any better by the Mexican people? Last week I sat down with MIT-educated Finance Minister Luis Videgaray, who is widely viewed as the economic brains of the Peña Nieto operation, to try to find out.