Mexicans Have Yet to See Benefits of Economic Overhaul as Growth Remains Sluggish Tim Johnson - McClatchy-Tribune
go to original June 5, 2014

A woman sits in the main square of a Mayan indigenous town of Oxkutzcab in the Yucatan Peninsula of Mexico. (Tim Johnson/McClatchy-Tribune)

MEXICO CITY — The central bank chief calls it a “temporary pothole.”

Whatever the term, Mexico’s economy has hit some turbulence – despite the most ambitious overhaul to its business structure in decades.

Tax hikes have dampened consumer confidence, retail sales remain stagnant, and low U.S. demand for Mexican-made cars and televisions slowed the economy earlier this year to its lowest point in four years. Mexico grew at a sluggish 1.8 percent rate in the first quarter of 2014, forcing the government to ratchet down its forecast to 2.7 percent growth for the year.

Bankers and economists still voice hope that Mexico is on the threshold of faster growth because of the opening of the energy, banking and telecommunications sectors. “We know that the reforms don’t have an immediate effect and that it is necessary to have patience and persevere,” a Spanish banker, Francisco Gonzalez Rodriguez, chief executive of Banco Bilbao Vizcaya Argentaria, or BBVA, told a forum this week.

“I am sure that we will see the ‘Mexican moment’ in 2015,” said an executive of BBVA’s operations in Mexico, Vicente M. Rodero.

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