Violence has affected investment, growth: Mexico’s central bank

April 8th, 2011 - 11:06 am ICT by IANS  

Mexico City, April 8 (IANS/EFE) Crime and violence have become “the most important factors inhibiting growth and investment” in Mexico in the past few months, the governor of the country’s central bank said.

“Beyond the judgment of the bank, this is the opinion of investors” who have reported “that this factor affects the possibilities for business”, Banco de Mexico Gov. Agustin Carstens told the Senate Wednesday.

Surveys of business executives and analysts provide a way of evaluating the situation, Carstens said, adding that poll results reflect the concern about crime.

The war being waged against Mexico’s drug cartels by President Felipe Calderon’s administration has helped citizens but had negative effects on the economy, the central bank chief said.

“The problem is being fully dealt with … but it helps us on the one hand, but it is a reality, on the other hand, that cannot be avoided,” Carstens said.

A total of 15,270 people died in drug-related violence in Mexico last year, and more than 35,000 people have died since Calderon declared war on the country’s cartels shortly after taking office in December 2006.

The years 2010 and 2011 have been good for Mexico from a macroeconomic standpoint, with growth accelerating, the central bank chief said.

The Banco de Mexico forecasts economic growth of between 3.8 percent and 4.8 percent for this year, Carstens said.

All sectors of the economy are performing above the 2008 level and growth is more balanced, thanks to a domestic market that has “been reactivated” as private investment rises, the central bank chief said.

Economic growth in the US, however, is expected to slow next year, “making it necessary to find our own sources of growth and, at the same time, to implement structural reforms”, Carstens said.


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