November 15, 2018 / 8:53 PM / 4 months ago

Incoming Mexican government has little room for error: adviser

NEW YORK (Reuters) - An adviser to Mexican president-elect Andres Manuel Lopez Obrador sought on Thursday to reassure investors in New York, following weeks of upheaval in Mexican financial markets and doubts about the policies of the incoming left-leaning government.

President-elect Andres Manuel Lopez Obrador talks about his security plan to the media, before he takes office as Mexican President on the December 1, in Mexico City, Mexico November 14, 2018. REUTERS/Henry Romero

Abel Hibert, an economic adviser to Lopez Obrador, acknowledged that financial markets were watching closely.

“We recognize that we have one opportunity to show responsibility in the elaboration of the next budget,” Hibert said to a crowd of investors at a business forum in New York.

“The design of the public budget will be very careful,” he said. “We don’t have room for mistakes.”

Markets were shook in recent weeks by announcements from the incoming administration that it would cancel a partly-built $13 billion Mexico City airport and limit bank commissions.

On Thursday, the Mexican stock benchmark index .MXX touched its lowest level in nearly three years.

Hibert estimated the cost of calling off the airport project at 0.7 percent of the country’s gross domestic product.

Without detailing specifics, he said some plans for next year would be scrapped as a result.

“Some of the social and infrastructure projects must be postponed to leave room for the financial consequences of the cancellation of the airport project,” Hibert said.

During his presentation, he said someone with a similar profile to recently-nominated independent economist Jonathan Heath would fill the central bank board seat that will be vacated after deputy governor Roberto del Cueto steps down on Nov. 30.

The country’s president nominates appointees to the bank board, who must be ratified by Congress.

“The substitution of Roberto will be in the same profile as Jonathan (Heath),” Hibert said, adding that the incoming government values the autonomy of the central bank.

Lopez Obrador will be sworn in as Mexico’s new president for a six-year term, without possibility of reelection, on Dec. 1.

Reporting by Rodrigo Campos; Editing by Chizu Nomiyama and Rosalba O'Brien

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