3 Min Read
By David Alire Garcia
MEXICO CITY, April 1 (Reuters) - Mexican economic growth should accelerate to around 4.0 percent in 2014, up from an estimated 3.5 percent for this year, the country's Finance Ministry said Monday.
Mexico's economy has grown by nearly 4 percent annually over the past two years, and hopes are high the government of new President Enrique Pena Nieto can spur faster growth with an ambitious programme of economic reforms.
The ministry's prediction was part of its latest budget forecasts, and it noted that the new estimates "do not consider the eventual approval of a fiscal reform" or other economic reforms currently being pushed by Pena Nieto.
Among the reforms planned is a fiscal overhaul aimed at improving the country's tax take as well as a shake-up of the energy sector intended to lure more private sector investment.
Optimism about the reform push has helped to boost the peso in recent weeks, and the ministry said it expected a stronger Mexican currency in 2013 than it had before. It saw the average peso-dollar exchange rate at 12.5 per dollar this year compared with a previous estimate for 12.9 per dollar. Next year it sees the exchange rate averaging 12.6 pesos per dollar.
Overall, the ministry projects a balanced budget for 2014, excluding debt accumulated by state oil monopoly Pemex . The federal government's 2013 budget also avoids a fiscal deficit.
The ministry also lowered the forecast for the 2013 average interest rate for the country's 28-day Treasury Certificates, or Cetes, from 4.6 percent to 4.1 percent. The new estimate is in line with the central bank's 50 basis point rate cut last month, its first rate cut in nearly four years.
One of the major planks of Pena Nieto's reform plan is to boost efficiency and production at Pemex. The government has said output will stagnate without significant new investment, and the world's no. 7 oil producer risks becoming a net oil importer if it fails to improve production trends.
The ministry said it expects average crude oil production to hold steady at 2.55 million bpd for both 2013 and 2014. Average oil prices are seen dropping to $82.90 per barrel in 2014 from $86 per barrel in 2013, the ministry said, a fall of 3.6 percent.
Meanwhile, average oil exports are seen dipping to 1.156 million bpd in 2014 from 1.184 million bpd in 2013, down 2.4 percent.
Mexico, Latin America's second-biggest economy, is a top crude oil exporter to the United States, and the country relies on oil revenues to fund about a third of the government budget.