MEXICO CITY – Bad economic news continues to stall Mexico’s growth and undermine government efforts to portray the country as possessing a robust financial situation ahead of a major expansion of the oil-exploration industry.
Oil exports and production fell in the first four months of the year, forcing Mexico for the first time to import more oil industry products from the United States than it exported northward, officials said.
Bank of America Merrill Lynch Global Research announced that Mexico was mired in recession the first part of the year, news reports said, despite Mexican government claims to the contrary.
Finance Minister Luis Videgaray acknowledged that growth was slower than the government had predicted but rejected the characterization of a recession. He cited the government’s statistics agency as saying the economy was merely “stagnated.”
“So the problem is that Mexico is growing at a lower rate than it should be, and continues to grow at the rates it has been growing, on average, for the last three decades,” Videgaray said.
“Mexico is growing,” he added, but “it is definitely not the growth that Mexico needs. … Our rhythm of growth must accelerate.”
The government has been forced repeatedly to dial down its predictions of economic growth, with the pace following what has been a generally underperforming rate for years.
The 18-month-old government of President Enrique Pena Nieto had predicted growth this year at 2.7 percent; instead, the economy has grown by 1.8 percent, Videgaray said. At one point, the government predicted rates of 5 percent or 6 percent, closer to those in some of Latin America’s more prosperous economies, such as Chile.
To reach growth of 2.7 percent, the gross national product would have to soar 3 percent each of the following three quarters, said Juan Pablo Castanon, a Mexican private-sector business leader.
Because Mexico’s economy is so intertwined with that of the United States, it is still recovering from its northern neighbor’s financial downturns. In addition, Pena Nieto’s government has been widely criticized for failing to spend money in its first months, contributing to sluggishness.
Videgaray and other government officials insist that a battery of major reforms, including opening the oil and gas industry to foreign investment, is essential to improve the picture.