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 Business News | February 2006 
Hurricanes Slowed Mexico's Economy
 Luis Rojas Mena - Reuters
| | Workers install pipes used to drain sand to recover the beaches devastated by Hurricane Wilma in the city of Cancun, Mexico. The government has initiated reconstruction of beaches destroyed by Hurricane Wilma. (AP/Israel Leal) |
Mexico City - Mexico's economy faltered at the end of 2005 as hurricanes upset tourism, farming and oil exports, holding growth for the full year to a disappointing 3 percent.
Gross domestic product grew about 3 percent in the fourth quarter, preliminary government data showed Monday, down from 3.3 percent in the third quarter.
The government had initially projected growth of more than 4 percent in 2005 but weak manufacturing output forced it to lower its forecasts throughout the year.
Still, the finance ministry insisted the economy could grow 3.6 percent this year.
Consumer spending is fueling the economy, with Mexican families taking advantage of cheaper credit to buy new furniture, televisions and washing machines.
Growth was a strong 4.4 percent in 2004, but soft U.S. demand for Mexican-made cars undermined Mexico's crucial manufacturing sector last year.
Mexico was then hit in late 2005 by a volley of hurricanes that destroyed Caribbean holiday resorts, disrupted crude oil exports to U.S. refineries and damaged farm infrastructure.
Reconstruction work made up for some of the lost income, the finance ministry's chief economist, Alejandro Werner, said.
"The impact is relatively moderate," Werner said, adding that there were other holiday resorts, reconstruction projects and insurance payments "that had a compensatory effect."
He said agricultural output was expected to show a decline of between 9 and 10 percent in the fourth quarter of 2005.
The ministry said Mexico's budget deficit was 0.09 percent of GDP in 2005, well within its stated goal of 0.2 percent.
Exports rose 19 percent year-over-year in the fourth quarter, helped partly by higher oil prices, and with manufacturing exports recovering rapidly to rise a robust 17.4 percent.
Imports were up 13.8 percent in the quarter. About 90 percent of Mexico's exports go to the United States.
Also Tuesday, the Bank of Mexico reported that remittances sent home by Mexicans living abroad rose to $20 billion in 2005, a 17 percent increase over the year before.
The country's top source of foreign income is oil, and exports totaled $31.7 billion in 2005. About 11 million Mexican natives reside abroad, with 98 percent of that number in the United States.
The Associated Press contributed to this report.
Bank Of Mexico: Immigrants Sent $20 Billion Back
Associated Press
Mexico City - Remittances sent home by Mexicans living abroad, mostly in the U.S., rose to $20 billion in 2005, a 17 percent increase over the year before, the Bank of Mexico reported Tuesday.
Remittances climbed by more than $5.3 billion in the fourth quarter of 2005 alone, the bank said. They totaled $16.6 billion in 2004.
Remittances have been climbing steadily for years, surpassing the amount the country receives from tourism, which totaled $10.7 billion in 2005.
The country’s top source of foreign income is oil, whose exports totaled $31.7 billion in 2005. An estimated 8- to 11-million Mexican natives work in the U.S legally and illegally. |
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