With very little to brag about so far in economic terms, the one-year-old government of Enrique Peña Nieto, president of Mexico, is betting on a banner year in 2014.
Having learnt a tough lesson on the crucial role that government spending, particularly on infrastructure projects, plays in Mexico’s economic performance, the government is not just trying to avoid this year’s budget delays — it is already moving on with assigning projects that are scheduled to start in 2014.
At least it is doing so with Tuesday’s planned announcement of 15bn pesos (US$1.15bn) worth of public work projects it plans to assign through public bidding processes.
As a result, the authorities are hoping that by announcing these new projects as early as Tuesday, they’ll be ready to allocate them in the first weeks of January so that the winners can start their construction by late next month or early February.
Continue reading »
Mexico may be all the rage among investors. But praise the country in polite Mexican society and you risk running a gauntlet of abuse. John Authers, the FT’s investment columnist and a former Mexico bureau chief, describes the situation very well.
Certainly, President Pena Nieto’s reform agenda gets high marks for concept but low marks for delivery. Of his four biggest initiatives, the detail of telecom reform is still being worked out; ditto education; the fiscal reform was disappointing; and we don’t yet know the full shape of the energy reform. No wonder the understandable scepticism, then, of much local conversation – even if the intensity of that conversation has meant missing another problem that has not won the discussion it deserves. Continue reading »
Here is a reminder, if any were needed, of how economists and investors have turned sour on Latin America during the course of this year.
Continue reading »
How ironic. Just after Mexico’s annual three-day bargain weekend known as the “buen fin” racked up sales of 160bn pesos ($12m) , retail sales data for September was published – and they were terrible.
The 4 per cent drop in retail sales in September (and a 0.4 per cent month-on-month fall) comes just as the economy was showing tentative green shoots after a year in which growth is now expected to struggle to top 1 per cent – less than a third of the government’s heady early predictions.
Continue reading »
Capital Economics reckons the worst of Mexico’s annus horribilis is behind it. Share the optimism?
Let’s see: in terms of economic data this week, industrial production fell by 1.6 per cent (way higher than the 0.4 per cent market consensus) in September. That was dragged down by construction, which crashed 8.3 per cent, its 13th successive monthly fall, but manufacturing was anaemic too. Continue reading »
Mexico is slowing – so says the central bank on Wednesday, cutting growth forecast to 0.9 – 1.4 per cent, down from its previous estimate of 2-3 per cent – Banxico’s second consecutive quarterly cut (you can read the story here on Fast FT).
But Mexican car production and exports are revving up, hitting record levels in October. Not bad for an economy where manufacturing confidence is still in the doldrums. Continue reading »
So… Mexico’s economy is looking up, isn’t it? Despite another sluggish print in the third quarter, when the economy expanded just 1 per cent, the government praised the increasing dynamism of the manufacturing and export sectors.
Hmmm. That official confidence has yet to prove catching, it seems. Not only was manufacturing confidence perilously close to the threshold between optimism and pessimism in October, but consumer confidence and producers’ confidence also tumbled.
Consumer confidence, which was down for the second month running, fell by 0.5 points in seasonally adjusted terms and was lower in four out of the five components measured.
Continue reading »
Mexico is going to have to pull its socks up if it wants to reach the government’s official growth forecast this year.
Let’s recap: the economy saw first quarter growth of 0.8 per cent; a second quarter contraction of 0.7 per cent, and now third quarter growth of 1 per cent. Continue reading »
Mexico’s consumer confidence has been on the rise and there are tentative signs of economic recovery.
But the optimism has yet to percolate through the economy. Banks’ bad debts are at their highest level in a decade and up a staggering 41 per cent in a year. Continue reading »
So much for cementing a recovery. Cemex, the Mexican cement company that is one of the biggest in the industry in the world, disappointed with another loss in the third quarter that was significantly bigger than the market had been expecting. Bloomberg said it was the 16th straight quarterly loss.
Cutting its coat according to its cloth, it also announced a reduction in capex to $620m this year from expectations of $700m. Continue reading »
How much is too much? When it comes to the watering down of Mexico’s tax reform, the jury seems to be out.
First let’s backtrack a moment. The lower house of Congress late last week made a slew of changes to what was already a softer reform package than had been widely expected. Many were less than impressed – and Bank of Mexico Governor Agustín Carstens reckoned the government will have to have another stab at the issue again. Continue reading »
Good news for the Mexican government.
Forget worries slowing growth or the impact of the US shutdown and fears of a debt ceiling Armageddon. Mexico is finding it cheaper and cheaper to borrow. Continue reading »
By Larry Brainard of Trusted Sources
On a two-week visit to Brazil and Mexico last month I had an opportunity to test claims that Mexico had leapfrogged Brazil as the most dynamic economy in Latin America. I found that political risk is still the key to each country’s prospects and that a simple answer to who is ahead of whom is unattainable. Continue reading »
It has been a long, long time – since 1999 to be precise – since Wal-Mart de México has turned in such a poor performance.
Walmex, as Walmart’s Mexican arm is known, reported a 4.7 per cent drop in same-store sales in September, the biggest monthly sales decline recorded in 14 years. Continue reading »
When is economic stagnation good news? When it compares with contraction. Which is why Mexican manufacturing purchasing managers’ index data out this week looked sparkling compared to similar data from Brazil, not to mention compared to its performance in the past few months. Continue reading »