Mexico Sees Zero Expansion

Mexico’s finance secretary Agustin Carstens says Mexico will likely not grow in 2009, adding that if the US government implements a strong enough stimulus package, it could expand slightly. His prediction is similar to that of several shops. Credit Suisse expects GDP to rise just 0.6%, Merrill Lynch predicts 0.4% and JPMorgan sees no growth at all. Since 80% of Mexican auto industry exports go to the US, Merrill expects the slowdown in the US to hurt consumer spending, dent employment levels, cause a drop in real wages and a decrease in worker remittances. Credit Suisse says Mexico’s industrial output will contract by 2.2% in 2009, compared to a fall of 0.3% in 2008.