Sunday, January 18, 2009

Economy Recession in Mexico -1.2% decline in 2009: UN

Economy Recession in Mexico -1.2% decline in 2009: UN

* The crisis is deeper and more prolonged what was thought Rob Vos
* In the best of scenarios advanced 0.7%
* Risk of forced landing of the U.S. dollar

In the best case scenario, the progress of our economy for 2009 would be 0.7 percent, but the risk of a deep global recession, especially the U.S., and because of our proximity to that country, the outlook is pessimistic that a record decline of 1.2 percent.

According to the report World Economic Situation and Prospects 2009, prepared by specialists from the United Nations (UN), the risks facing the economy of the world show that the crisis is deeper and more extensive, so we thought.

This, because of the prolonged credit restriction in the major economies, the strong capital investment in emerging countries and the possibility that this was a forced landing of the U.S. dollar.

Rob Vos, director of the Division of Policy Development and Review Department of Economic and Social Affairs of the UN, said that the pessimistic scenario, "Mexico, which is very close to the United States is very concerned and in 2009 will decline by 1.2 cent.

The greatest damage

Thus, Mexico will be in developing countries with significant decreases in its Gross Domestic Product (GDP), which contrasts with the outlook for other nations.

For example, in the baseline scenario, Brazil will advance 2.9 percent, and at worst, 0.5; China may register a maximum of 8.4 and a minimum of 7 percent, India, from 7 to 4.7, and Russia, between 4.8 and 2.5.

"Mexico and Central American countries are those that have the greatest impact in the global economic downturn.

This subregion will be directly hit by the recession in the U.S. market, which sent its manufactured exports and providing employment to its migrants, "says the study.

For Vos, in the pessimistic scenario, there is a risk that the assessment was that the U.S. dollar sunk to come, because once they are completed and support programs reinvestment again come to light the U.S. deficit, which cause a fall in the greenback.

Given the current situation, he added, the U.S. president-elect, Barack Obama, only the option of printing more dollars to fund its programs, and this will cause the currency is cheaper, and if the fall is sharp can cause panic in financial markets.

Moderate ambient

In a moderate, said the U.S. recession in 2009 will mean that the economy will decline 1 percent, Japan 0.3 and the 15 European Union countries 0.7, while the new EU members will advance 3.1 percent.

This situation affects all developing countries, but especially the middle-income and exporters of primary products, because there will be a reduction in international trade, an estimated 4.4 percent increase in 2008 down to 2.1 2009, and in the worst scenario will fall further, something that has not been seen since 2001.

A Vos is concerned about the rising cost of financing for developing countries and that private capital flows are reversed. Moreover, the crisis has not bottomed out and we must avoid a forced landing generating financial panic.

At a press conference, the director of Mexico for the seat of the Economic Commission for Latin America and the Caribbean (ECLAC), Jorge Mattar said the Latin American region, including our country, facing declines in exports, remittances in income from tourism and foreign direct investment.

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