méxico banxico ingles
TRANSCRIPT
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United
States
Mexico
Chamber
of
Commerce,
Los
Angeles,
CA,
November
15,
2013
Mexicosmonetarypolicyandeconomicoutlook
ManuelSnchez
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Monetarypolicyandeconomicoutlookthemes
Output slowdown and signs of an incipient rebound
More stringent international financial conditions
Lower inflation and monetary flexibility
The possibilities from structural reforms
Mexicosmonetarypolicyandeconomicoutlook 2
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Mexicosmonetarypolicyandeconomicoutlook
Since the middle of 2012 the Mexican economy slowed,
and in 2Q13 output fell
3
RealGDP
Quarterlyandannualchange,%,s.a.
s.a./Seasonallyadjusted
Source:INEGI
8
6
4
2
0
2
4
6
8
6
5
4
3
2
1
0
1
2
3
Q1
2007
Q3 Q1
2008
Q3 Q1
2009
Q3 Q1
2010
Q3 Q1
2011
Q3 Q1
2012
Q3 Q1
2013
Quarterly
Annual(leftaxis)
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Mexicosmonetarypolicyandeconomicoutlook
The origin of the declining growth seems to have lied first in softer
external demand and then in a contraction of domestic investment
4
Realaggregatedemand
Quarterlychange,%,s.a.
s. a. / Seasonally adjusted
Source: INEGI
3
2
1
0
1
2
3
Q1
2012
Q2 Q3 Q4 Q1
2013
Q2
Exportsofgoodsandservices
Investment
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Mexicosmonetarypolicyandeconomicoutlook
As for investment, rising purchases of machinery and equipment
have not compensated for the fall in construction investment
6
Totalfixedinvestment2008=100,s.a.
s. a. / Seasonally adjusted and trend
Source: INEGI
70
80
90
100
110
120
130
Jan
07
May
07
Sep
07
Jan
08
May
08
Sep
08
Jan
09
May
09
Sep
09
Jan
10
May
10
Sep
10
Jan
11
May
11
Sep
11
Jan
12
May
12
Sep
12
Jan
13
May
13
Construction
Machineryandequipment
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Mexicosmonetarypolicyandeconomicoutlook
which mainly reflects lower expenditures in public works
and private housing building
7
Realconstructionoutput2008=100,s.a.
s. a. / Seasonally adjusted and trend. The seasonal adjustment and the trend were prepared by Banco de Mxico with
data from INEGI
Source: INEGI
40
60
80
100
120
140
Jan
07
May
07
Sep
07
Jan
08
May
08
Sep
08
Jan
09
May
09
Sep
09
Jan
10
May
10
Sep
10
Jan
11
May
11
Sep
11
Jan
12
May
12
Sep
12
Jan
13
May
13
Public
Privatehousing
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Mexicosmonetarypolicyandeconomicoutlook
These shocks have weakened labor market conditions
8
38,000
39,000
40,000
41,000
42,000
43,000
44,000
45,000
46,000
47,000
48,000
80
85
90
95
100
105
Q1
2007
Q3 Q1
2008
Q3 Q1
2009
Q3 Q1
2010
Q3 Q1
2011
Q3 Q1
2012
Q3 Q1
2013
Q3
Realwagebill
Employees(left
axis)
Realwagebillandemployment
2008=100,thousands
Source: Own calculations with data from INEGI
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Mexicosmonetarypolicyandeconomicoutlook
Lower consumer confidence has coincided with the first
decline of consumption during the postcrisis period
9
Retailsalesandconsumerconfidence2008=100,s.a.
90
95
100
105
110
80
90
100
110
120
Jan
07
May
07
Sep
07
Jan
08
May
08
Sep
08
Jan
09
May
09
Sep
09
Jan
10
May
10
Sep
10
Jan
11
May
11
Sep
11
Jan
12
May
12
Sep
12
Jan
13
May
13
Sep
13
Consumerconfidence
Retailsales(leftaxis)
s. a. / Seasonally adjusted and trend
Source: INEGI and Banco de Mxico
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Economic activity decelerated in spite of extraordinarily
favorable financial conditions in the first part of the year
10Mexicosmonetarypolicyandeconomicoutlook
Source: Proveedor Integral de Precios (PiP)
Yieldcurve
%
3
4
5
6
7
8
1
day
1
month
3
month
6
month
1
year
3
year
5
year
7
year
10
year
20
year
30
year
December30,2011
December31,2012
May10,2013
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11
The financial bonanza was shared with other emerging
markets
Emergingeconomies:accumulatedcapitalinflows1
BillionU.S.dollars
1/ Equity and debt
Source: Emerging Portfolio Fund Research
20
0
20
40
60
80
100
1 3 5 7 911
13
15
17
19
21
23
25
27
29
31
33
35
37
39
41
43
45
47
49
51
2012
2013
May
Mexicosmonetarypolicyandeconomicoutlook
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Mexico has been one of the preferred destinations of
portfolio capital flows
13Mexicosmonetarypolicyandeconomicoutlook
Emergingeconomies:foreignholdingsoflocalgovernmentbonds1
Percentageoftotalgovernmentsecuritiesincirculation
1/Federalgovernmentdebtissuedonthedomesticmarket,inlocalcurrency
Source:Selectedcountries centralbanksandfinanceministries
0
10
20
30
40
50
60
70
Q4
2010
Q1
2011
Q2 Q3 Q4 Q1
2012
Q2 Q3 Q4 Q1
2013
Q2 Q3
NewZealand
Peru
Malaysia
Mexico
Poland
Turkey
Thailand
Korea
Brazil
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Since May, market anticipation of tapering translated into
lower asset prices for emerging markets, including Mexico
14Mexicosmonetarypolicyandeconomicoutlook
Source: Proveedor Integral de Precios (PiP)
Yieldcurve
%
3
4
5
6
7
8
1
day
1
month
3
month
6
month
1
year
3
year
5
year
7
year
10
year
20
year
30
year
May10,2013
September18,2013
November14,2013
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15
It is likely that international financial conditions will be less
benign in the future
So far financial adjustments have occurred in an orderly way
Capital outflows were not extraordinary
Foreign holdings of government bonds declined only
modestly
Foreign exchange market remained highly liquid
However, given the uncertainty over the future course of U.S.
monetary policy, new bouts of volatility cannot be ruled out
Mexicosmonetarypolicyandeconomicoutlook
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Mexicosmonetarypolicyandeconomicoutlook
Some indicators suggest that economic activity might have
somewhat picked up in 3Q13
16
107
108
109
110
111
130
135
140
145
Apr13
May
13
Jun
13
Jul13
Aug
13
Sep
13
Dollarvalueofexports
Production(leftaxis)
Manufacturing2008=100,s.a.
s. a. / Seasonally adjusted
Source: Banco de Mxico and INEGI
93
94
Jun
13
Jul13
Aug
13
Constructioninvestment2008=100,s.a.
s. a. / Seasonally adjusted
Source: INEGI
Servicesproduction2008=100,s.a.
s. a. / Seasonally adjusted
Source: Mexican National Accounts System (SCNM), INEGI
112
113
114
115
Apr13
May
13
Jun
13
Jul13
Aug
13
GlobalEconomic
Activity
Indicator
2008=100,s.a.
s. a. / Seasonally adjusted
Source: Mexican National Accounts System (SCNM), INEGI
108
109
110
Apr13
May
13
Jun
13
Jul13
Aug
13
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17
The 2014 fiscal package will impact inflation, economic
activity, and the use of financial resources
Mexicosmonetarypolicyandeconomicoutlook
Estimatedeffectsoffiscalpackagefor2014
Effects
Annualinflation(endofyear) 40basispoints
GDP
growth 0.2
percentage
points
Increaseinpublicsectorborrowingrequirements 1.2percentagepointsofGDP
Source:BancodeMxico(2013),InformesobrelaInflacinJulio Septiembre2013,November
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18
The economy is expected to recover gradually in 2014 and
2015
GDPforecastAnnualgrowth,%
1/ Maximum, average and minimum
Source: Banco de Mxico (2013), Encuesta sobre las expectativas de los especialistas en economa del sector privado,October; Banco de Mxico (2013), Informe sobre la Inflacin Julio Septiembre 2013, November; and LatinAmericanConsensus Forecasts, October
Mexicosmonetarypolicyandeconomicoutlook
0.9
3.0 3.2
1.41.7
4.0
4.5
4.2
5.2
1.2
3.4
4.0
0
1
2
3
4
5
6BanxicoSurvey1
0.5
2.5
3.4
BanxicoInflationReport
2013 2014 2015
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Downsideriskstothisscenarioseemtoprevail
A pause in the U.S. economic recovery
Heightened global risk aversion
Further deterioration of the construction sector in Mexico
Weakening consumer confidence
Mexicosmonetarypolicyandeconomicoutlook 19
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During the last decade, monetary policy has been focused
on achieving a 3 percent permanent inflation target
Monetarypolicyinterestrate1
Annual,%
Mexicosmonetarypolicyandeconomicoutlook
1 / Since January 21, 2008
Source: Banco de Mxico
20
3
4
5
6
7
8
9
Jan
08
May
08
Sep
08
Jan
09
May
09
Sep
09
Jan
10
May
10
Sep
10
Jan
11
May
11
Sep
11
Jan
12
May
12
Sep
12
Jan
13
May
13
Sep
13
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21Mexicosmonetarypolicyandeconomicoutlook
Annual headline inflation has consistently remained below
historical levels
Annualheadlineinflation
%
0
3
6
9
12
15
18
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Source:INEGI
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22
Monetary accommodation during 2013 has not endangered
the convergence to the 3 percent inflation target
Mexicosmonetarypolicyandeconomicoutlook
Factors behind monetary policy decisions
Significant deceleration of the economy
Foreseeable decline in inflation
Given the current fiscal policy no further cuts in the policy
interest rate are warranted in the future
Closing future output gap
Real monetary policy interest rate already close to zero
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24
Source:BancodeMxico
Inflationexpectations%
The persistent gap between medium and longterm
inflation expectations and the target remains a challenge
0
1
2
3
4
5
6
7
Jan
11
Mar
11
May
11
Jul11
Sep
11
Nov
11
Jan
12
Mar
12
May
12
Jul12
Sep
12
Nov
12
Jan
13
Mar
13
May
13
Jul13
Sep
13
Next4years Next
58years
Mexicosmonetarypolicyandeconomicoutlook
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25
Shortterminflationrisksshouldcontinuetobemonitored
Mexicosmonetarypolicyandeconomicoutlook
Secondround effects from
Higher than expected impact from tax changes
Higher financial volatility
Upward pressures from noncore price components
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26Mexicosmonetarypolicyandeconomicoutlook
Mexico should tackle the most important problem that has
inhibited longterm economic growth
Mexico:growthaccounting1
Averageannualchange,%
1/ Own calculations based on data from World Development Indicators, International Financial Statistics, Conference Board Total
Economy Database; and data and theoretical formulation of Kehoe, T.J. and F. Meza, (2011), Catchup Growth Followed by
Stagnation: Mexico, 19502010,Latin American Journal of Economics, 48(2). The sum of the parts may not add up due to rounding
19501980 19802012
GDPper
capita 3.4 0.8
Totalfactorproductivity 2.8 0.6
Capitalcontribution 0.6 0.7
Laborcontribution 0.0 0.6
Laborintensity 0.2 0.1
Proportionof
working
age
population
0.2 0.7
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27
The current reform agenda seeks to bring significant
productivity gains
Some salient features
Hiring and firing flexibility will increase labor productivity
Competitive conditions for teachers may eventually favor thequality of education
The entry of new players could provide wider and cheaper
access to telecommunications services
Private participation in energy may lower key input prices
Full benefits require
Efficient secondary legislation
Adequate implementation
Mexicosmonetarypolicyandeconomicoutlook
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Summary
Sustained economic recovery will require the support of external
demand and the revival of the construction industry
It is likely that international financial conditions will be less
supportive in the future
Medium and longterm inflation expectations have remained
stable in spite of recent spikes in agricultural prices
Given the current fiscal policy no further cuts in the policy
interest rate are warranted in the future
Adequate implementation of structural reforms may foster long
term economic growth
Mexicosmonetarypolicyandeconomicoutlook
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29Mejoranlasperspectivaseconmicasmundiales