August 4, 2009
Mexico's economists grew more pessimistic about the country's economy in July and were preparing for a deeper recession, according to a survey published on Monday by the Bank of Mexico.
"Specialists estimated increased contraction rates, as compared with the previous survey, and reduced production and private sector demand estimates," the bank said in a statement.
They were expecting a 10.2 percent decline in gross domestic product (GDP) for the second quarter, 6.4 percent for the third and 3 percent for the fourth quarter. The average full year decline was forecasted at 6.9 percent, compared with 6.3 percent in a survey one month earlier. Earlier this month, Mexico's National Statistics Agency said the nation's economy shrank by 11.1 percent in May from a year earlier.
According to Monday's survey, economists now expect the peso to end the year with a value of 13.48 pesos to a U.S. dollar. In March, the estimate was for 14.25 pesos to a dollar. The peso was traded at around 13.2 pesos to a dollar on Monday.
Those surveyed expected a cut of 658,000 formal jobs by the end of the year, an estimate that has remained steady in recent months.
Some 25 percent of the experts consulted by the bank were concerned about weaker-than-expected export markets, due to sluggish growth in the U.S. economy, which is responsible for 80 percent of the nation's exports.
They were also worried that the government might be unable to implement planned structural changes needed to boost the economy.