Teaching Comparative Government and Politics

Monday, October 07, 2013

Slow down in economy might slow down reforms

This might put a crimp in the president's reform agenda. Is it an external input or a domestic input into the machinery of government?

Economists dial down projections for Mexico's growth
Storms and insecurity are further eroding once-optimistic predictions for Mexico’s economic growth, analysts say.

At the start of the year, Mexico’s new government under President Enrique Peña Nieto boasted of a robust economy that would grow at a rate of more than 3.5%, better than many countries in the region. Those boasts earned positive headlines for Mexico beyond its borders, as officials here portrayed a country ready to leap into prosperity.

President Peña Nieto
Now, however, even government economists have had to dial down the projections. 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…

The government insists the overall economy remains healthy, will avoid recession and will pick up when wide-ranging reforms proposed by Peña Nieto are finally enacted. Those include a tax overhaul and opening the state oil monopoly to foreign investment.

“I’m confident the deceleration is temporary,” Reuters quoted Agustin Carstens, the head of the Bank of Mexico, as saying. He added that Mexico’s “solid macroeconomic pillars” should bring the country out of its slump by early next year.

The shaky economic performance comes as violence continues in many parts of the country…

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