News Column

Mexico expects stronger growth over rest of 2014

May 28, 2014

Mexico City, May 28 (EFE).- Mexico's government said it expects economic growth to pick up over the remainder of the year after a disappointing first quarter and also reiterated the need to deepen structural reforms.

"Mexico must dare to change," Finance Secretary Luis Videgaray said at a meeting of regional directors of BBVA Bancomer, Mexico's leading financial institution.

In his speech, Videgaray noted that Mexico's gross domestic product grew just 1.8 percent in the first quarter relative to the same period of 2013 and referred to the government's downwardly revised forecast of 2.7 percent growth for all of 2014.

External and internal factors both played a part in the first-quarter result, some of them circumstantial and others structural, according to Videgaray, who added that Mexico is still growing faster than the United States, most European countries and nations such as Brazil.

He said the government's revised forecast of 2.7 percent growth, announced after first-quarter data was released last week, is "slightly higher" than the average growth rate of the past 13 years and therefore Mexico must do things "differently" to achieve better results.

Videgaray stressed that overhauls such as opening up the energy sector to private investment and boosting competition in the telecoms industry were approved in "just 15 months" and will serve to "remove bottlenecks to economic growth."

The finance secretary said the structural reforms carried out thus far by President Enrique PeÑa Nieto's administration will allow Mexico to grow at an average clip of 5 percent in the coming decades, a level that "really will change Mexico's economic structure."

The first-quarter result was due to sluggish growth in the United States, Mexico's leading trading partner, but also domestic causes such as a continued decline in oil production, Videgaray said.

Based on economic indicators for the second quarter, better results are expected in the latter part of the year compared to the first quarter, the secretary said.

BBVA Bancomer is forecasting that Mexico's economy will grow 2.5 percent this year - a level "still far below its potential" - but it expects "more investment, more employment and greater economic growth" in 2015.

The unit of Spanish banking giant Banco Bilbao Vizcaya Argentaria is forecasting 3.5 percent growth next year. "We think 2015 can be a great year for Mexico," Videgaray said. EFE


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Source: EFE Ingles

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