According to a recent report by the Wall Street Journal, the Bank of Mexico has raised estimates for economic growth in 2011. This announcement was prompted by an expectation for lower inflation over the next few months, which is largely due to the strengthened Mexican economy at the end of 2010 and beginning of 2011. In a recent interview,Agustin Carstens, Gov. of The Bank of Mexico, said the bank expects the gross domestic product (GDP) to increase from 2010 figures by 3.8% to 4.8%. This is far more favorable than the original forecast, which noted an expected increase of only 3.2% to 4.2%. Carstens also suggested that revenues from housing and tourism will remain relatively stable during 2011.
The figures were released in the bank’s quarterly inflation report, which also saw their forecast for the consumer price index. They have suggested that the CPI average annual rate will rise by only 3-4% in the first quarter, which is a decrease from the bank's original estimates of 3.75-4.75%. In addition, the report highlights improvements in the overall economic climate of Mexico over the fourth quarter of 2010 and beginning of 2011. Carstens attributed this to a wide array of indicators from the U.S economy, which have exceeded expectations.
Other positive news came to light when the bank suggested that, thanks to the strong Mexican economy, even more jobs are expected to be created. Throughout 2011 and 2012, from 600,000 to 700,00 formal job positions could be added.
Carstens went on to discuss internal spending within Mexico, which has focused largely on investment in infrastructure and consumption. He also noted that exports are helping to improve the economic forecast for Mexico and that differences between production and output are expected to diminish during the second half of 2011.
Another point Carstens raised is the fact that Mexico has so far managed to avoid the higher global commodity prices which are affecting other parts of the world. He said that this was due to the appreciation of Mexico’s exchange rate and to a variety of factors that are specific to Mexico’s own production.