Mexico’s central bank raises growth forecast

February 10th, 2011 - 3:15 pm ICT by IANS  

Mexico City, Feb 10 (IANS/EFE) Mexico’s central bank has announced it has revised upward its forecast for economic growth this year, from a range of 3.2 percent to 4.2 percent to one of 3.8 percent to 4.8 percent.Banco de Mexico economists estimate that Mexican gross domestic product grew 4.3 percent in the final quarter of last year and 5.4 percent for all of 2010, central bank governor Agustin Carstens told a press conference in the capital Wednesday.

“Aggregate demand in Mexico continued to show a rising tendency in the final quarter of 2010,” according to the central bank’s latest inflation report, while “exports of goods and services appeared to resume a growth trajectory”.

The gap between Mexico’s actual and potential GDP expansion also narrowed in the fourth quarter of last year, the bank said.

Banco de Mexico expects the Mexican economy to generate 600,000-700,000 new jobs annually over the next two years and is predicting a 2011 trade deficit of $10 billion, or 0.9 percent of GDP.

On the subject of inflation, the central bank said that while recent hikes in international grain prices have affected the cost of wheat- and corn-based products in Mexico, they “have not extended to the rest of the foods”.

Even so, some 30,000 people took to the streets of Mexico City last week to protest rising prices for staples.

Carstens cautioned Mexicans against viewing the apparent economic recovery in the US as a panacea for Mexico.

Though the US economy “looks better than we were expecting a few months ago, there is no doubt that (US) growth in the coming years will be slower than what we’re accustomed to”, the central bank chief said.

Mexico needs to “strengthen the internal sources of growth”, Carstens said.

The US is Mexico’s leading trade partner and remittances from US-based emigrants constitute this country’s second-largest source of revenue after oil exports.

–IANS/EFE
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