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Latino Daily News

Sunday September 29, 2013

Storms Proving to Have Negative Effect on Mexican Economy

Storms Proving to Have Negative Effect on Mexican Economy

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Mexican Finance Secretary Luis Videgaray acknowledged that the impact of Tropical Storms Ingrid and Manuel on Mexican territory will affect economic growth, which will drop from the projected 1.8 percent to 1.7 percent.

“This means that if it would have grown by 1.8 percent without Tropical Storms Ingrid and Manuel, it’s probable that now it will grow by around 1.7 percent,” Videgaray said on Radio Formula.

The two meteorological phenomena, which at one point reached hurricane strength, left 146 dead, 53 missing and hundreds of thousands homeless last week, according to figures announced Saturday by Mexican Government Secretary Miguel Angel Osorio Chong.

The head of Mexican economic policy said the full impact will chiefly be seen in September, but added that the following months will show a favorable comeback, one reason being the amount of revenues allocated to reconstruction.

He said the government has a total of 17.5 billion pesos (some $1.3 billion) for reconstruction work nationwide, chiefly in the southern state of Guerrero.

Of these funds, 12.5 billion pesos ($948 million) are from the Disaster Fund, or Fonden, while another 5 billion ($379 million) have been taken from other items on the budget.

The minister said lawmakers are already working to modify the 2014 budget in order to provide more funds for reconstruction.

According to preliminary figures from insurers, storm damage has climbed to some 75 billion pesos ($5.7 billion), while assets covered by insurance amount to only 20 percent of the total value.

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