The reduction in homicides during the first few months of the Peña Nieto administration is barely noticeable. This is one of the conclusions of a report, “Evolution of Violence, Trimester Report 2013,” prepared by the Mexican Institute for Competitiveness (IMCO), which points out that after comparing all registered homicides in the fourth trimester of 2012 with the first of 2013, violence was reduced a mere 0.6%.
If there were ever any proof of the need for structural economic reform in Mexico, you could do worse than to look at February’s retail sales, which came in far below expectations.
On Monday, the government’s statistics agency reported that sales were down 0.1 per cent in February compared with the previous month in seasonally adjusted terms, and a chilling 2.6 per cent down on figures for the same month last year. HSBC had predicted a 1 per cent increase, and Banamex, Citi’s Mexico arm, had expected a 0.5 per cent increase). All in all, that is the worst year-on-year fall in more than three years. So what’s going on?
Mexico’s government wants to boost lending by making it easier for banks to collect on guarantees for bad loans and by giving new powers to regulators to punish firms that do not lend enough, according to a draft of a new banking reform. The proposal, a copy of which was seen by Reuters, is due to be announced next week, and is part of a raft of measures designed to ramp up growth in Latin America’s second biggest economy.
Thrashed out within a pact made between President Enrique Pena Nieto and the leaders of the main opposition parties, the banking reform targets Mexico’s conservative banks, which boast high capital levels but lend much less than their foreign peers.