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 Business News | February 2008 
Mexican GDP Grows 3.3 Percent in 2007 as Foreign Investment Soars
 E. Eduardo Castillo - Associated Press
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Mexico City – Mexico's economy grew 3.3 percent in 2007, slightly faster than the government had projected, as foreign investment soared amid a cooling in the United States, the Treasury Department said Tuesday.
Gross domestic product, the broadest measure of goods and services produced, was boosted by brisk 4.4 percent gains in the service sector, which helped compensate for slowing 2 percent growth in agriculture and 1.4 percent growth in industry, the department said in a news release.
Growth slightly beat the government's preliminary forecast of 3.2 percent for 2007, but was still outpaced by 4.8 percent gains seen in 2006.
The Treasury last month lowered its growth projection for 2008 to 2.8 percent from 3.7 percent, reflecting a sharp slowdown in the U.S. economy, which buys 80 percent of Mexico's exports.
Also Tuesday, Mexico's Economy Department, a separate cabinet office, announced that foreign direct investment rose 21 percent in 2007 to $23.2 billion, the second-largest amount in its history.
Half of the total invested went to manufacturing, signaling a supply of “well-paid jobs, and that there is trust in the administration of President Felipe Calderón,” Economy Secretary Eduardo Sojo told reporters.
The outlays represent the second-largest amount of foreign direct investment in Mexico, following the $29.5 billion invested in 2001, when Citigroup Inc. bought Mexico's Banamex for $12.5 billion.
Nearly half of investments came from the United States, while Holland followed with 15 percent and Spain with 10 percent, Sojo said.
Sojo declined to estimate foreign direct investment for 2008, which he said could be an “atypical” year as the U.S. faces a possible recession. The government will release a 2008 forecast within several weeks, he said.
Associated Press Writer Olga R. Rodriguez in Mexico City contributed to this report.
Mexico Current Account Deficit Widens to $2.1 Billion
Adriana Arai - Bloomberg
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Mexico's current account deficit widened in the fourth quarter as gasoline imports jumped.
The deficit, the broadest measure of trade in goods and services, totaled $2.12 billion, compared with $1.32 billion in the third quarter, the central bank said today on its Web site.
The deficit for the whole of 2007 was $7.37 billion, or 0.8 percent of gross domestic product, compared with $2.22 billion the previous year, or 0.3 percent of GDP.
Foreign investment rose 14 percent in the fourth quarter to $9.79 billion. Investment in Mexican financial markets, led by fixed-income bets, jumped to $5.12 billion in the quarter, topping company spending on production and acquisitions, according to the central bank.
To contact the reporter on this story: Adriana Arai in Mexico City at aarai1(at)bloomberg.net |
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