Mexico unveils emergency spending plan
After taking an initially optimistic attitude toward the economic crisis ravaging the rest of the world, President Felipe Calderon warned on Wednesday that Mexico faces a fall in exports, investment and remittances as a result of the U.S. economic slowdown and announced plans for $4.3 billion in emergency spending on infrastructure to help Mexico amid world financial woes.
As we reported here, Mexico’s finance secretary Agustin Carstens said at the end of last month that the country would be able to withstand the crisis in the global financial markets because its banks aren’t reliant on external credit.
Although President Calderon insisted that Mexico's banks were solid despite the global economic crisis, he admitted in a televised address yesterday that it was clear that the slowdown in the U.S. and elsewhere would have repercussions in Mexico, including a decline in demand for Mexican exports, less investment and fewer tourists.
"At the same time, many migrants who send money from the U.S. to their families, either now have no job or are afraid of losing it, which suggests there will be less in remittances sent to Mexico," Mr. Calderon said.
Remittances to Mexico from nationals living in the United States fell by 12% in August.
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-- Deborah Bonello in Mexico City
