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As President of the Coordinating Business Council of Mexico Juan Pablo Castañón put it, "the private sector will invest no less than 3.5 trillion pesos despite the difficulties. To clarify, it will be 3.5 million pesos of productive investments in the country. "
According to Castañón, the entrepreneurs have some basic tasks, in accordance with which they will operate. In particular, these are institutional development, human capital, sound economic policies, effective operation of government.
Castañón believes that implementation of the planned will push Mexican GDP growth up to 5% by 2020.
It is obvious that the country has already mentally prepared for a possible trade war with the United States. President of Mexico Enrique Peña Nieto pledged to firmly defend the country's interests in forthcoming negotiations on revision of the North American Free Trade Area (NAFTA). He said this last week, speaking at closing session of the National Agricultural Council.
Mexican authorities have already started consultations with representatives of the business community about possible parameters of NAFTA’s revision.
"In any agreement, any contract, in any negotiations with the United States or any other country in the world, President of the Republic (Mexico) will always defend the sovereignty and interests of Mexicans," - said Peña Nieto. It is expected that members of NAFTA - Mexico, Canada and the United States - will discuss revision of the agreement’s terms in May this year.
The largest banks in the world also believe in the Mexican economy. A possible trade war is likely to harm the Mexican economy, say bankers, yet cheap peso opens up new opportunities.
"There are a lot of advantages in Mexico, and these advantages are significant, no matter what happens in trade relations with the United States - said Citi’s CFO John Gerspach. - The weak peso will increase competitiveness". A month before the US presidential election, Citi, which owns Mexican bank Citibanamex, spoke of plans to invest up $ 1 billion in the business over the next four years. "We will keep this pace up," - says Gerspach. Citibanamex brought 15% of Citi’s revenue from retail business in IV quarter 2016.
Santander also plans to carry out its investment program worth 15 billion pesos ($ 718 million at current exchange rates), announced in December. The money will be spent on modernization of retail outlets, ATMs and IT-systems during the next three years. Santander earns about 10% of net profit in Mexico. "We expect that we will be doing well in Mexico, even though it will be difficult," - told Ana Patricia Botín, Executive Chairman of Santander Group.
BBVA earns almost half of net profit in Mexico through the largest local bank BBVA Bancomer. "Mexico is going to have big problems, but they will cope with them, - said Francisco González Rodríguez, Group Executive Chairman of BBVA. - Political relations between Mexico and the United States will go back to normal over time."
On the other hand, investors are not so confident in the future. Devaluation of the Mexican currency totaled 20% for 2016 in total. According to José Antonio Meade, Mexican Secretary of Finance, decline of the national currency reflects pessimistic investor sentiment caused by uncertainty in relations with the United States.
source: reuters.com, wsj.com
According to Castañón, the entrepreneurs have some basic tasks, in accordance with which they will operate. In particular, these are institutional development, human capital, sound economic policies, effective operation of government.
Castañón believes that implementation of the planned will push Mexican GDP growth up to 5% by 2020.
It is obvious that the country has already mentally prepared for a possible trade war with the United States. President of Mexico Enrique Peña Nieto pledged to firmly defend the country's interests in forthcoming negotiations on revision of the North American Free Trade Area (NAFTA). He said this last week, speaking at closing session of the National Agricultural Council.
Mexican authorities have already started consultations with representatives of the business community about possible parameters of NAFTA’s revision.
"In any agreement, any contract, in any negotiations with the United States or any other country in the world, President of the Republic (Mexico) will always defend the sovereignty and interests of Mexicans," - said Peña Nieto. It is expected that members of NAFTA - Mexico, Canada and the United States - will discuss revision of the agreement’s terms in May this year.
The largest banks in the world also believe in the Mexican economy. A possible trade war is likely to harm the Mexican economy, say bankers, yet cheap peso opens up new opportunities.
"There are a lot of advantages in Mexico, and these advantages are significant, no matter what happens in trade relations with the United States - said Citi’s CFO John Gerspach. - The weak peso will increase competitiveness". A month before the US presidential election, Citi, which owns Mexican bank Citibanamex, spoke of plans to invest up $ 1 billion in the business over the next four years. "We will keep this pace up," - says Gerspach. Citibanamex brought 15% of Citi’s revenue from retail business in IV quarter 2016.
Santander also plans to carry out its investment program worth 15 billion pesos ($ 718 million at current exchange rates), announced in December. The money will be spent on modernization of retail outlets, ATMs and IT-systems during the next three years. Santander earns about 10% of net profit in Mexico. "We expect that we will be doing well in Mexico, even though it will be difficult," - told Ana Patricia Botín, Executive Chairman of Santander Group.
BBVA earns almost half of net profit in Mexico through the largest local bank BBVA Bancomer. "Mexico is going to have big problems, but they will cope with them, - said Francisco González Rodríguez, Group Executive Chairman of BBVA. - Political relations between Mexico and the United States will go back to normal over time."
On the other hand, investors are not so confident in the future. Devaluation of the Mexican currency totaled 20% for 2016 in total. According to José Antonio Meade, Mexican Secretary of Finance, decline of the national currency reflects pessimistic investor sentiment caused by uncertainty in relations with the United States.
source: reuters.com, wsj.com
