Growth seen taking off in ’15

Tuesday, 01 July 2014 01:10

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

thenews.com

THE NEWS

The top official with ECLAC, a highly respected regional economic commission, said Monday that Mexico is ready to rebound from its poor economic performance in the last year citing ramped up public spending, increased foreign direct investment and the recent package of structural forms as key detonators of the coming recovery.

Speaking before the start of the sixth annual Latin American And Caribbean Economic Forum in Paris, Alicia Bárcena, executive secretary of the Economic Commission for Latin America and the Caribbean (ECLAC in English, CEPAL in Spanish), predicted that the Mexican economy will take off at the beginning of 2015.

The key factor, she said, is the public spending program, much of it on infrastructure, embarked upon by the administration of President Enrique Peña Nieto.

“An increase in public spending over last year has already been achieved,” she said. “The spending is profound but orderly, which is a great detonator of growth.”

She also pointed to the steady flow of foreign direct investment into Mexico, which is expected to jump significantly in the near future.

“Foreign direct investment continues to enter Mexico carrying much potential,” she said.

The structural reforms, especially in the fiscal, telecommunications and energy areas, are significant, she said, but more complex in that the benefits won’t be in the short term.

“The fiscal reform is a good reform,” she said. “It steers the nation in the right direction and is going to have a very positive effect in the medium range. The telecommunications reform is also good new because it´s going to open up that playing field.”

The energy reforms have to be handled correctly, she said. “What has to be watched carefully is how the production profits are distributed,” she said. “The process has to be fair and help other sectors of the economy.”

She praised President Peña Nieto’s reform strategy.

“Promoting such deep reforms at the beginning of his administration was an important decision because that’s when it has the best chance of success,” she said.

According to Bárcena, the effects of the reform will be felt by the middle of Peña Nieto’s term, which is to say toured the end of 2015. But the other factors will lead to significant growth in the gross domestic product by early next year.