National government is introducing expansionary Mexico economic policy that would deal with fiscal and monetary areas in this time of economic recession when wages are falling, credits and debts are piling up and organizations are firing people.
Economic policy in Mexico initiated by national government has been successful to a certain extent as is illustrated by fact that Mexico’s GDP has expanded by 4 percent in fiscal year of 2008. It was estimated that GDP purchasing power parity was $1.578 trillion, while real growth rate in Mexico was 2 percent. However, this growth can be maintained if problems in housing and credit markets are settled quickly as part of an economic policy at Mexico. If Mexico economic policies are implemented properly rate of growth of national economy could be 0.6 percent by end of 2009. However, this prediction may not be met because of financial crunch and credit crisis.
As per economic policies of Mexico Bank of Mexico, which happens to be an independent central bank, has dropped its interest rate by half a percentage point. Mexico is more focused on making its national economy stable. Fiscal measures, which have been taken, include decrease in energy prices, extra investment in roads, railways and oil wells. It also extends medical cover, welfare assistance and provisional jobs to those who are unemployed. It is expected that this Mexico economic policy will help in prevention of recession.
Government guarantees credit lines and offers loans to small business houses. Stabilization of value of peso has been ensured. This was done after central bank made an expenditure of $15 billion of its reserves.
To reduce social impact of recession, government forwarded some fiscal measures that would save jobs of more than 150,000 people. Steps will be taken to deal with unemployment problems. It has been estimated that public debt is about 30 percent of GDP.
Mexico economic policy is working on basis that if recession continues till 2010, national government will be able to motivate economy. This is so because government saved an amount equal to 1.8 percent of GDP as stabilization funds and these have not been spent. Tax system, labor laws and decline of inequality in income should be taken up by government for development of economy of Mexico. Currency plan and fiscal structure also helps in economic growth of Mexico and contribute to Mexico GDP as well.
[quote] The day is not far off when the economic problem will take the back seat where it belongs, and the arena of the heart and the head will be occupied or reoccupied, by our real problems – the problems of life and of human relations, of creation and behaviour and religion. [/quote]
Nouriel Roubini, a.k.a. “Doctor Doom”, is chairman of Roubini Global Economics and professor of economics at New York University’s Stern School of Business. Roubini has been consistently cited as one of the world’s top global thinkers. This year, he was voted as the most influential economist in the world by Forbes magazine.
Professor of Economics & Director of the Earth Institute at Columbia University. Special Adviser to the UN Secretary-General on the Millennium Development Goals. Founder & co-President of the Millennium Promise Alliance.
Mario I. Blejer is a former governor of the Central Bank of Argentina and former Director of the Center for Central Banking Studies at the Bank of England. Eduardo Levy Yeyati is Professor of Economics at Universidad Torcuato Di Tella and Senior Fellow at The Brookings Institution.
Vice President and Director of the Global Economy and Development Program at the Brookings Institution. Former Turkish Minister of State for Economic Affairs. Head of the United Nations Development Program (UNDP) from 2005-2009.