MEXICO CITY, Aug 18 (Reuters) - Mexico cut its forecast for 2005 economic growth to 3.5 percent after sluggish U.S. demand for car exports unexpectedly slowed expansion in the second quarter, a senior presidential advisor said on Thursday.
The government said this week Mexico’s second-quarter gross domestic product grew only 3.1 percent, pushing its previous year-end growth forecast of 3.8 percent out of reach.
“That now looks a bit more difficult. We would have to have a very strong second half to achieve that growth,” Eduardo Sojo, who is President Vicente Fox’s public policy coordinator, told Radio Formula in an interview.
“We still think it’s going to be a growth year, maybe around 3.5 percent,” he said.
In the first quarter of 2005 the economy grew only 2.4 percent. Second quarter growth was 3.1 percent over the same period in 2004 but fell from the first three months of this year as agriculture output dropped and manufacturing softened.
As America builds security wall with Mexico to stop illegal immigration, it forgets the real culprit – outsourcing from Asia
The U.S. House of Representatives voted on Dec. 16 to build a wall along the United States'' border with Mexico to stop illegal immigration. But American has forgotten the real culprit that is dragging this superpower down – outsourcing from India, China and other Asian countries.
While illegal immigration must be stopped, the same effect on the economy and may be worse is felt through greedy businesses sending jobs abroad in the name of outsourcing.
America is divided between haves and have-nots.
Brazil reverses course to close higher; Mexico rises
Brazilian equities finished higher Monday as investors took advantage of prices declines earlier in the session, and Mexican stocks were supported by a rally in U.S. markets as investors focused on a drop in oil prices.
In Sao Paulo, the Bovespa rose 174 points, or 0.5%, to close at 34,972.74.
Brazilian shares lost ground earlier in the session, reacting negatively to a sell-off in the currency, said Ricardo Amorim, head of Latin American strategy at WestLB.
The real hit 2.2377 against the U.S. earlier in the day, its lowest level since June 28,
Mexico, Brazil Inflation Slows, Paving Way for Rate Reductions
Slowing inflation in Mexico and Brazil, Latin America's two biggest economies, is paving the way for central bankers to cut interest rates and curb gains in their currencies, analysts such as UBS AG's Michael Gavin said.
Government reports scheduled for release today will show Mexico's annual inflation rate dropped to a record low in September while Brazil's rate held near its lowest in 16 months, according to more than a dozen economists surveyed by Bloomberg.
Declining inflation rates may prompt Mexico to reduce its benchmark lending rate for a third straight
Brazil Overtakes Mexico in Economies
The hefty appreciation of Brazil's currency against the dollar over the last two years has helped Brazil overtake Mexico as Latin America's largest economy in dollar terms.
Brazil had gross domestic product of $794.4 billion for the four quarters ending June 30, according to a report issued Thursday by the Brazilian Census Bureau, known by its Portuguese acronym IBGE. Mexican GDP stood at $765.7 billion for the same period, Mexico's government reported earlier.
GDP measures the value of all goods and services produced in any given country, and Brazilian GDP has been growing faster than Mexico's.
But the
Mexicos Peso Falls to Eight-Week Low Amid Inflation Concerns
Mexicos peso dropped to an eight- week low against the dollar and local-currency bonds fell on expectations inflation quickened last month.
The peso fell as much as 0.6 percent today before a report that is expected to show consumer prices rose 0.44 percent last month, the biggest increase in seven months, according to the median forecast of 16 economists in a Bloomberg survey. Accelerating inflation decreases the value of peso-denominated assets.
The inflation number today is going to look pretty bad, said Raul Rodriguez, head of economic analysis at Mexico City- based
Brazil's economy overtakes Mexico
The hefty appreciation of Brazil's currency against the dollar over the last two years has helped Brazil overtake Mexico as Latin America's largest economy in dollar terms.
Brazil had gross domestic product of $794.4 billion for the four quarters ending June 30, according to a report issued Thursday by the Brazilian Census Bureau, known by its Portuguese acronym IBGE.
Mexican GDP stood at $765.7 billion for the same period, Mexico's government reported earlier.
GDP measures the value of all goods and services produced in any given country, and Brazilian GDP has been growing faster than Mexico's.
But the biggest
Mexico's Peso Rises to 28-Month High on Interest Rate Outlook
Mexico's peso rose to its strongest against the dollar since July 2003 on speculation that the yield advantage of the country's securities relative to the U.S. will remain high, helping to attract increased investment.
Interest-rate reductions by MexicO'S central bank probably will be limited in the months ahead by the U.S. Federal Reserve's actions and will help keep Mexico's bonds and peso attractive, said Lawrence Goodman, head of emerging markets strategy with Bank of America.
``A Fed that is likely to tighten rates will ultimately place a limit on how
Currency Strategists: BNP Says Mexico's Peso May Fall
The Mexican peso, up 4.5 percent versus the dollar this year, will drop in 2006 as the central bank cuts its benchmark interest rate amid slowing inflation, said Rafael de la Fuente, chief economist for Latin America at BNP Paribas SA.
The peso has dropped 1.4 percent since the central bank lowered its key rate by a greater-than-expected half a percentage point to 8.25 percent on Dec. 9, the fifth reduction since August. Mexico's currency may also decline on concern lower rates will reduce the yield advantage of domestic bonds.
``We still
Brazil, Chile, Mexico, Peru: Latin America Local Bond Preview
The following events and economic reports may influence trading in Latin American local-currency bonds today. Bond yields are from the previous session.
Argentina {ARGENT }: Argentina's currency weakened 0.2 percent, its fifth straight decline, to 3.06 pesos per U.S. dollar as Argentines traveling abroad during the summer months buy foreign currency.
The yield on Argentina's 5.83 percent bond maturing in 2033 remained unchanged at 6.19 percent, according to Banco Mariva in Buenos Aires. {ARARGE03E121 DES }.
Brazil {BLTN }: Brazil's real rose for a second day on speculation companies
Mexico cheers backing of immigrant bill by panel
Mexicans cheered the proposal approved Monday by the Senate Judiciary Committee to legalize undocumented migrants and provide temporary work visas, and credited huge marches of migrants across the United States as the decisive factor behind the vote.
President Vicente Fox of Mexico said the vote was the result of five years of work dating to the start of his presidential term in 2000, and puts Mexico one step closer toward the government's goal of ''legalization for everyone" who works in the United States.
''My recognition and respect for all the Hispanics and all the Mexicans
