Photo: Mexican Economic Growth 2012
Mexico’s economy will grow 3.25 percent in 2012 even though the economic problems in Europe and the United States remain unresolved and could lead to even bigger woes, the Mexican Institute of Finance Executives, or IMEF, said.
The global crisis could adversely affect the Mexican economy given the export sector’s role as the country’s main “engine of growth,” the institute said.
The country’s exchange rate also may be affected by greater uncertainty and volatility in financial markets, the IMEF said Tuesday in a report.
Despite the pessimistic outlook for the global economy, the specialists are forecasting an average inflation rate of 3.65 percent, an average exchange rate of 13 pesos per dollar and the creation of 505,000 new jobs in Mexico in 2012.
But the IMEF sees Mexico’s economy expanding at just a 3.8 percent clip in 2011, down from its May forecast of 4.4 percent growth.
It said the outlook for Mexico’s gross domestic product worsened beginning in August due to Standard & Poor’s decision that month to strip the United States of its AAA credit rating for the first time, as well as fears surrounding the sovereign debt burdens of countries such as Greece, Italy and Spain.
In addition to lowering its GDP growth forecast for this year, the IMEF also remarked on the recent decline in value of the Mexican peso, which is currently priced at roughly 14 per dollar amid investors’ fears of a global economic slowdown, down from 12.45 per greenback at the start of 2011.
“The free-float system for the peso has worked and, while dollars are now more expensive, the peso’s depreciation has alleviated pressure on other fronts,” IMEF said.
It added that the situation is very different in Mexico than in the euro-zone countries, which cannot rely on currency devaluation as an adjustment mechanism.
Finally, the finance experts called on the contenders in Mexico’s July 1, 2012, presidential election to focus on achieving the economic growth necessary to ensure sufficient job creation.