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Mexico takes urgent economy steps

January 9, 2009
BBC News
1/8/2009
Source …..

The Mexican government has unveiled emergency measures to protect its economy from the global financial crisis and US recession.

President Felipe Calderon said Mexico was facing a period of great difficulty and rising unemployment.

He promised nearly $150m (£100m) to struggling industries in a bid to save hundreds of thousands of jobs.

The measure is part of a 25-point plan that includes freezing petrol prices and increasing unemployment benefits.

Mexico sends 80% of its exports to the US and also depends heavily on remittances from Mexican workers in the US so has been hit by the downturn in its neighbour’s economy.

“From the latest months of 2008 and throughout this current year we will be experiencing times of huge difficulties in terms of economic growth, investment and employment in our country,” said Mr Calderon.

He said the measures being taken would protect half a million jobs, mostly in export industries that depend heavily on the US market.

A further 250,000 jobs will be created by the bringing forward of several planned infrastructure projects such as road repairs and restoration of historic sites.

The BBC’s Stephen Gibbs in Mexico City says Mexico, like many countries in Latin America, used to think it would be largely immune from what began as the credit crisis in the US, but is now feeling the effects.

However, if oil prices remain low, Mexico could benefit from an earlier government gamble to hedge almost all its 2009 oil output at $70 a barrel, says our correspondent, earning the country several billion dollars.

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