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 Business News | March 2007 
Mexican Economy at Less Risk from U.S. Slump - Carstens
 Reuters
| | Mexican Finance Minister Agustin Carstens |
Guatemala City - Strong consumer demand and investment have made Mexico less susceptible than before to economic downturns in the United States, its main trading partner, Mexican Finance Minister Agustin Carstens said on Sunday.
With most exports from Mexico's key manufacturing sector destined for the United States, downturns in the U.S. economy have traditionally hit Mexico hard as U.S. demand declines.
Shipments of autos made in Mexico have declined in recent months due to falling U.S. demand, and the government expects economic growth of 3.6 percent this year compared with 4.8 percent last year, largely due to lower U.S. growth.
But Carstens, who is attending the Inter-American Development Bank's annual conference in Guatemala, said the link between the economies, though still important, was not as rigid as it used to be, thanks largely to strong demand within Mexico and a healthy rate of investment.
"Needless to say that the link is still very close and is still there but the degree of the impact (from slower U.S. growth) has been reduced," he said. "It is a fact that the Mexican economy has obtained more resilience."
While Mexican industrial production growth has faltered in recent months, data consistently show the country's construction sector, an increasingly important motor for the economy, is booming thanks in part to lower interest rates which have made mortgages more accessible. (Editing by Phil Berlowitz; Reuters Messaging: greg.brosnan.reuters.com@reuters.net +52 55 5282-7153) |
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