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ECONOMIC BRIEFINGS
Information provided by the Mexico Trade Commission-ProMexico’s
New York Office.
FITCH CONFIRMED MEXICO’S SOVEREIGN RATINGS
At the end of July, Fitch confirmed Mexico’s
sovereign ratings, mentioning solid macro-economic
policies and healthy external finance, in addition
to a modest foreign debt burden. The relative
diversity of Mexican economy, a robust financial
system and strong political institutions are
additional strengths, Fitch pointed-out in a press
release.
This is due to its consolidated domestic demand,
healthy growth in credits for the private sector,
certain diversification of trade partners and the
implementation of counter-cyclic fiscal policies.
Source: CNN Expansion
INFLATION IN MEXICO IS UP.
During the half part of the month of July, the
inflation rate has grown at 5.3% due primarily to
increases in food and tourism services. Until that
date, inflation has reached 2.3% for the year. The
concern about this increase is being reflected in
Mexico’s interest rate levels which have been rising
for the last several weeks from around 7.5% to more
than 8%.
Source: SHCP
THE MEXICAN PESO HAS SHOWN SIGNIFICANT STRENGHT
LATELY
At the end of July, the Mexican Peso has appreciated
significantly reaching 10.02 pesos / dollar, levels
not seen in more than five years. Coincidentally,
Mexico’s Foreign Exchange Commission announced that
it was canceling until further notice the mechanism
through which the central bank has sold dollars from
its reserve position on a daily basis since May
2003. This announcement is quite relevant as
prospects for potential further strength of the peso
was likely.
Source SHCP
MEXICAN EXPORTS KEEP GROWING
During the first six months of 2008, total exports
of goods and services are up 16.9% reaching $149.5
billion. This increase is due to a jump in oil
revenues by 50% and 11% from non-oil exports.
Source: INEGI
MEXICO’S FDI IS SO FAR SLOWING DOWN THIS YEAR
According to the Ministry of Economy, Foreign Direct
Investment in Mexico (FDI) has reached $4.2 billion
from January to March of this year, down 36% from
last year report. Notwithstanding this figures, the
Mexican government expects to achieve similar levels
of the investment received in 2007, given the
significant amounts of new projects that are being
announced in Mexico.
MODERATE GROWTH IS EXPECTED IN MEXICO.
A recent report from The Conference Board indicates
that according to forward looking indicators the
Mexican Economy will likely continue showing a
moderate expansion in the short term. This is good
news since we have not seen a significant impact on
the economy from the US slowdown.
Source: SHCP
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