Mexico Is Refinancing Pemex Debt After Getting IMF Reserves


Source: Bloomberg

Mexico has begun a process of refinancing state-owned Petroleos Mexicanos’s debt, after the nation received a transfer of about $12 billion from the International Monetary Fund. 

President Andres Manuel Lopez Obrador said Monday that refinancing had begun, and restated that he wants to use newly issued IMF reserves to pay debt, but that he couldn’t provide further details. His spokesman Jesus Ramirez confirmed to Bloomberg News that Pemex’s debt is being refinanced.


Offshore platform fire cuts Mexico oil output by 444,000 bpd


Source: Reuters

A fire that struck an offshore oil platform operated by Mexico’s state-run Pemex cut the company’s production by 444,000 barrels per day (bpd) due to the lack of natural gas to re-inject into crude fields, a company document showed on Monday.

At least one person died and five others were missing following an explosion on Sunday at Pemex’s E-Ku-A2 platform, part of a gas-processing center of the Ku-Maloob-Zaap complex in the Gulf of Mexico’s Bay of Campeche. The fire was brought under control hours later, Petroleos Mexicanos (PEMX.UL) said.


Mexico’s Above-Target Inflation Signals Rate Hike This Week


Source: Bloomberg

Mexico’s annual inflation remained far above the central bank’s target ceiling in July, keeping pressure on board members to continue raising interest rates at Thursday’s monetary policy decision.

Consumer prices jumped 5.81% compared to a year earlier, slightly less than the 5.88% rise seen in June but more than economists’ median estimate for a 5.78% increase, the national statistics institute reported Monday. Monthly inflation accelerated to 0.59%, compared to the 0.53% reading recorded in June.


The Mexican economy has been battered by the pandemic


Source: The Economist

When mexico’s president, Andrés Manuel López Obrador, was elected in 2018 he entered office with an approval rating of 76%, the highest for any new president in recent times. Astoundingly for an incumbent who has overseen one of the worst pandemic responses in the world, he remains popular, with nearly two-thirds giving him the thumbs up (see chart). Yet when it comes to his policies, Mexicans are far less sure of amlo, as he is known.

One of his weaknesses is the economy, which shrank by 8.5% in 2020, the worst slump since the 1930s. Some 47% of voters think he is managing it badly, second only to the share who disapprove of his handling of organised crime (52% think he is doing poorly at curbing gangs). That should worry him. On June 6th hundreds of seats are up for grabs in legislative, local and gubernatorial elections. Morena, the party he founded, which is now the head of a coalition government, leads in the polls. But the election will still be seen as an important test for his brand of populism.


Mexico unveils $14 billion investment plan to speed up ailing economy


Source: Reuters

MEXICO CITY (Reuters) – Mexico’s government presented an almost $14 billion infrastructure investment plan on Monday as President Andres Manuel Lopez Obrador seeks to repair rocky relations with business leaders and lift the struggling economy.

The package, mostly privately financed, is the first clear sign of corporate bosses’ readiness to invest under Lopez Obrador since the coronavirus pandemic this spring plunged Latin America’s second-biggest economy into its biggest slump since the Great Depression.


Mexico’s central bank holds rates, warns wage hikes could hit prices

5/17/2019 – Reuters


MEXICO CITY (Reuters) – Mexico’s central bank on Thursday said wage increases have outstripped productivity gains in some sectors, posing risks to inflation and employment, as it held its benchmark interest rate steady.

The Bank of Mexico’s (Banxico) board members voted unanimously to hold the overnight interbank rate at 8.25 percent, the level it has been at since Dec. 20. The rate is presently at its highest level since 2008.

Read more…

Mexico readies roll-out of tax deal with technology platforms

5/7/2019 – Bloomberg

techBy Eric Martin and Andrea Navarro

Mexico’s Finance Ministry plans to announce the roll-out of a landmark tax deal with technology platforms in the coming weeks, a top official said Monday.

Deputy Finance Minister Arturo Herrera confirmed the plans in an interview at Bloomberg News offices in Mexico City, while declining to elaborate. Bloomberg reported in November that the previous administration reached an agreement with Uber Technologies Inc. in which the platform will withhold taxes from partners who gain income from both its ride-hailing and food delivery services.

The country has been looking for ways to boost tax collection that’s the worst among members of the Organization for Economic Cooperation and Development. The previous administration was also in talks with Netflix Inc. to collect sales taxes from users. Airbnb Inc. had stepped away from talks that would have required the home-sharing website to collect income tax from its hosts.

Read more…

Mexico Plans to Tax Digital Platforms: Deputy Finance Minister

4/9/2019 – The New York Times


MEXICO CITY — Mexico’s finance ministry aims to tax digital platforms such as video streaming service Netflix in its budget plan for next year, a senior government official said on Monday.

Deputy Finance Minister Arturo Herrera said Mexico’s total tax take was too low relative to other Latin American countries and that it needed to increase public revenues.

Mentioning Netflix as one example, Herrera said there so far was no international agreement on how to tax digital services, given that their servers may be based in countries such as the United States, but there are customers in other parts of the world.

Read more…

Mexico central bank pares growth forecasts, cites ratings concern

2/28/2019 – Reuters

 REUTERS/Edgard Garrido/File Photo

MEXICO CITY (Reuters) – Mexico’s central bank on Wednesday trimmed its economic growth forecasts for this year and next, while flagging the risk of a sovereign ratings downgrade and warning of persistent inflationary pressures.

In a quarterly report, the bank lowered its Mexican growth forecast to between 1.1 percent-2.1 percent for full-year 2019 and 1.7 percent to 2.7 percent for 2020, echoing increasing skepticism among private sector economists on the economic outlook.

The bank had previously forecast growth of between 1.7 percent-2.7 percent for 2019, and 2.0 percent-3.0 percent for 2020.

Read more…

Banks Fret in Cozy Market Where Bounced Check Eats Two Days’ Pay

2/27/2019 – Bloomberg

Lujan Agusti/Bloomberg

“Mama, why did they take my money?’’

Tatiana Clouthier had put the peso equivalent of about $80 in a savings account for her daughter Maria a few months earlier. Then a statement arrived showing the new balance: zero. She recalls answering her ten-year-old’s plaintive question as best she could: “Because they charged you fees for I don’t even know what.’’

Mexican banks might have upset the wrong mother. Almost a decade later, Clouthier is among the most powerful lawmakers in President Andres Manuel Lopez Obrador’s party. And she’s backing a campaign that’s spread jitters through financial markets, to make the banks charge less.

High fees are a problem for Mexico’s economy, as well as for individual customers. Because their flip-side is an unusually low level of lending to households and businesses -– the kind that finances growth.

Read more…