| | |  Business News | October 2009 
Mexico's Economy to Grow 3% in 2010: Merrill Lynch
 Xinhua
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October 27, 2009
Mexico's economy will grow three percent in 2010, following a steep decline this year, U.S. investment bank Merrill Lynch said in a report published on Monday.
The bank also urged the Mexican government to undertake structural reforms and reduce dependence on its northern neighbor the United States.
Mexico's economy crashed 10.3 percent during the second quarter of this year, dragged by its export and tourism slumps.
Normally about 80 percent of Mexico's exports go to the United States and U.S. citizens are the bulk of the nation's tourists. However, U.S. consumption and travel have both nose-dived amid the financial crisis.
However, Merrill Lynch estimated that Mexico would recover and grow three percent in 2010 and 3.5 percent in 2011.
The bank also said the forecast inflation would be at least four percent until the end of 2011, above the Bank of Mexico's stated target of three percent. Mexico's September inflation was 4.89 percent, down 0.19 percent from August. Food and drink prices, which hit Mexico's poor people the most, have been rising most sharply this year.
Merrill Lynch also estimated Mexico's unemployment rate would not fall quickly, even though there are signs that Mexico's economy has begun a recovery.
At the start of the month, job search firm Manpower Mexico said Mexican employers have started to employ more people in July. Also this month, the Mexican Construction Industry Chamber (CMIC) revised down its estimate for full-year decline of the construction sector, a labor-intensive industry, to 5.5 percent. In June, the worst month of this year, the sector declined 8.8 percent.
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