Mexico GDP Beats Forecasts on Consumer Spending; Peso Rises

4/29/16 Bloomberg Business

pesoMexico’s economy expanded more than analysts forecast for the third time in four quarters as strength in domestic consumption offset weak exports and a drop in oil output. The peso extended its gain, rallying to the strongest level in more than four months.

Gross domestic product rose 2.7 percent in the first quarter from a year earlier, according to preliminary figures released by the national statistics institute Friday. That compared with the 2.4 percent median forecast of 19 economists surveyed by Bloomberg. From the previous quarter, GDP expanded 0.8 percent. The institute will release final GDP figures May 20.

Mexican consumers are spending more as inflation holds near a record low and remittances rise amid weakness in the peso. The country has been a bright spot for growth compared with some Latin American economies such as Brazil, and in an interview last week, central bank Governor Agustin Carstens said it may get even better as factors that have held back the expansion, such as weak exports, begin supporting growth.

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Mexico Peso’s Best Forecaster Says Fundamentals to Spur Recovery

2/26/16 Bloomberg

mexican pesosMexico’s peso will strengthen by the end of the year as economic fundamentals overcome the volatility spurred by a bearish outlook for emerging markets, according to Sireen Harajli, the currency’s most accurate forecaster at the end of last year.

Harajli, a currency strategist at Mizuho Bank Ltd. in New York, said measures announced by the government and central bank last week will support the peso, helping fight off the downward pressure created by investors who use it as a proxy hedge to protect against emerging-market declines. The peso has dropped 9.6 percent in the past three months, the second-worst performance among the world’s major currencies.

Mexican policy makers cited the damage done by short sellers seeking to mitigate risk after they raised interest rates at an unscheduled meeting and revamped their currency intervention program on Feb. 17. Mexico’s economy is growing faster than most of its peers, with gross domestic product expanding 2.5 percent in the last quarter of 2015. Inflation remains within the central bank’s target range.

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US dollars

Bank of Mexico Sold $2 Billion Last Week to Boost Peso

2/23/16 Nazdaq

US dollars

MEXICO CITY—The Bank of Mexico said Tuesday it sold $2 billion in U.S. dollars on the foreign-exchange market last week to support the peso.

The country’s foreign-exchange commission, which includes central-bank and Finance Ministry officials, last week approved direct intervention in the currency markets to help lift the peso. Officials say the peso’s weakness isn’t justified by the country’s solid economic fundamentals.

The switch from daily dollar auctions by the central bank to unannounced dollar sales was accompanied by other measures including a surprise interest-rate increase by the Bank of Mexico and plans to cut government spending this year by 0.7% of gross domestic product.

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Mexico to raise $2.5 billion in spectrum auction – regulator

2/18/16 Reuters 

carlos slim
Carlos Slim

Feb 18 Mexico’s telecoms regulator on Thursday said it will raise about 45 billion pesos ($2.5 billion) over the next 15 years after an auction of wireless spectrum.

The auction will allow the two participating companies, Carlos Slim’s America Movil and new rival AT&T Inc to deploy new mobile services and improve quality, the Federal Telecommunications Institute (IFT) said.

Final results of the auction, showing the size and amount of each company’s winning bid, will be shared within 10 business days, IFT said in a statement.

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Anxiety Rises in Mexico as the Peso Tumbles

2/12/2015 New York Times

peso by Guanatos GwynMEXICO CITY — The voluble talk-show host Andrea Legarreta broke from her routine of celebrity chatter and household tips recently to give her television viewers an impromptu lesson in global economics and the Mexican peso.

“The world economy has to do with what is going on with the Chinese economy, ob-vious-ly,” Ms. Legarreta, the host of the popular morning program “Hoy,” said, knowingly drawing out the last few syllables. With growth slowing in China, she added, “this generates nervousness in the whole world.” Her co-host, Raúl Araiza, chimed in: “One of the effects in Mexico is that the dollar costs just a bit more than it did.” Never fear, Ms. Legaretta answered: “Just because the dollar goes up, that doesn’t mean the price of everything we buy goes up. Do you want to know why?”

Then she muddled through an explanation of exchange rates and cheaper exports, only to trail off with an admission that she was still confused. But in the end, Ms. Legaretta and Mr. Araiza agreed, Mexicans should not worry about the tumbling peso unless they hanker for expensive imports

Jose Antonio Meade on Combating Poverty in Mexico

2/11/16 Harvard Political Review

13317170344_3f13f47d5c_oHarvard Political Review: In the last five years, you have been in four different Secretary positions—Energy, Finance, Foreign Affairs, and now Social Development. What is next? What is the biggest challenge for you in 2016?

Jose Antonio Meade: I believe public service is a vocation, a vocation that has a path and a journey. And many times, in politics as well as in life, what matters is the journey. If one is preoccupied with the final destination, one runs the risk of not only losing focus on the journey but of not enjoying or taking advantage of it, even deviating from the said journey. That, for me, as a life lesson has always been important. Today, who I am, is the secretary of social development, a fascinating institution, an institution that allows me to touch lives and to transform the stories of families. I hope that what is next is a remembrance of good management of the secretariat [of social development].

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