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 News Around the Republic of Mexico | March 2008 
Mexican Government Announces $5.6 Billion Economic Stimulus Package
 Mark Stevenson - Associated Press
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| “In the face of these adverse prospects, the Mexican government has taken unprecedented steps to diversify exports and strengthen the domestic market, mainly through investment in infrastructure, farming and housing to reduce the effects on our economy.”
- President Felipe Calderón | | |
Mexico City – President Felipe Calderón announced a 60-billion-peso ($5.6 billion) package of tax breaks, utility-rates discounts and spending programs Monday to help Mexico's economy weather the slowdown in the U.S. economy.
Companies will get a 3 percent income tax break for the next five months and 10- to 20-percent electricity rate reductions, as well as credit from development banks and an increase in infrastructure spending to help them overcome the effects of what Calderón called “an adverse international environment.”
“Since last year, the economic performance of our principal trading partner (the United States) has show signs of deceleration,” Calderón said at a ceremony to announce the package. “The problems in its financial sector and housing market make its prospects for growth in 2008 not very encouraging.”
Finance Minister Agustin Carstens said that so far this year, “the economic environment has weakened much more than originally anticipated.” In January, the Finance Ministry lowered its economic growth estimate for 2008 from 3.7 percent to 2.8 percent.
“In the face of these adverse prospects, the Mexican government has taken unprecedented steps to diversify exports and strengthen the domestic market, mainly through investment in infrastructure, farming and housing to reduce the effects on our economy,” Calderón said.
Companies also will see reductions in mandatory payroll benefit payments, and the state-owned Pemex oil company will boost spending on maintaining and repair its aging pipeline network by $935 million.
However, Calderón noted that “contrary to what is occurring in the United States, our banking and financial system is enormously solid.”
Mexico, where home mortgages are much less widespread than in the United States, has faced nothing like the housing market crisis unfolding in its neighbor. Mexico, an oil-exporting nation, is also benefiting from historically high oil prices. |
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