Mexico

Mexico Investment

Mexico’s Messmacher Says at Least 3% Growth Likely

By Jens Erik Gould

Jan. 22 (Bloomberg) -- Miguel Messmacher, chief economist at Mexico’s Finance Ministry, said there is a “very high” probability that the country’s economy will grow more than 3 percent this year.

Mexico’s unemployment rate, which hit the lowest mark in nine months today, and its 2009 trade deficit mean the economy is showing a strong recovery, Messmacher said today in a telephone interview. Domestic and external demand is improving, leading to a recovery in exports and sales, he said.

“We’re seeing 3 percent as a floor,” Messmacher said. “We’ve had three months of decreases in the unemployment rate, which is very good news.”

Mexico’s economy is improving amid a recovery in the U.S., which buys around 80 percent of its exports, after it probably contracted the most since 1932 last year. The jobless rate was 4.8 percent in December, the lowest since March, after reaching a high of 6.41 in September, the statistics agency said today.

The country today reported a trade deficit of $248 million in December, around eight times smaller than the $2.1 billion deficit reported in December 2008. The total trade deficit for 2009 was almost four times smaller than the 2008 deficit.

“Exports are showing a very strong recovery,” Messmacher said. “There are no doubts about the stability of external accounts in Mexico.”

Mexico’s peso will strengthen if the economy grows more than the market expects, Messmacher said.

Latin America’s second-largest economy will expand 2.95 percent this year, according to the median forecast of 19 economists in a Bloomberg survey.

The peso is up 0.9 percent this year, the third-best performance against the dollar among 16 major currencies, on prospects increased demand from the U.S. will help spur the recovery.