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News Article

‘Unusual’ Economy Ahead / Audit of Development Banks

By Ricardo Guzman | Wed, 09/09/2020 - 11:53

Herrera warns of unusual economy. As long as there is no COVID-19 vaccine Mexico’s economy will be “unusual,” Minister of Finance (SHCP) Arturo Herrera said while presenting the 2021 Economic Package. “As long as there is no vaccine, the economy will continue to operate in unusual circumstances,” he noted despite highlighting that there has been a gradual reopening process thanks to “a clear downward trend in infections.” Herrera also said that the 4.6 percent growth forecast for 2021 is a responsible estimation and explained that the government is aware that the pace of the pandemic will determine when other sectors reopen.

2021 economic package presented. President López Obrador presented the 2021 Economic Package together with Minister of Finance (SHCP) Arturo Herrera. “It is the roadmap for achieving priority objectives for national development. What is required to end 2020 is guaranteed, and the budget for 2021 has already been presented,” the president said. The document will go to the Senate for approval. Herrera stressed that there are signs that point to a recovery of the Mexican economy. “At the same time, there is a recovery in our trade partners, so we are going to take advantage of the (USMCA) treaty,” he said.

Announces audit of development banks. President López Obrador said development banks will be audited next year to prevent further cases like those involving Odebrecht operations, the Etileno XXI plant and the overpriced purchase of a fertilizing plant. “In the Odebrecht and the fertilizer (affairs), a development bank was used in a very irregular, discretionary manner, with management ordering loan approvals. The same was done with the farming bank Banrural, so we are going to audit,” he said. López Obrador noted that the Ministry of Finance (SHCP) and the Revenue System (SAT) must get involved to assess all loans given for the Odebrecht operations and the Etileno XXI plant, since “very strange” things happened in regard to VAT payments.

More options for vaccines. Mexico has other options to acquire a COVID-19 vaccine, President López Obrador said after AstraZeneca stopped trials due to adverse effects in a patient. “We have a similar relationship with two or three companies that are also in Phase 3 of the vaccine research,” he said. The president noted that the government has received proposals for vaccines being tested in Russia, China and the US, and that there is no risk in regard to having the vaccine on time when ready to provide for the Mexican population.

0.11 percent increase for AMLO. In line with his austerity policy, President López Obrador will receive an increase in his monthly salary of only MX$132 (US$6) for next year, Arturo Herrera said. Last year, the president received MX$111,990 (US$5,200) per month. A 0.11 percent increase was approved for 2021. Herrera said the federal budget to be allocated next year for pensions and retirement plans will exceed MX$1 billion (US$460 million) for the first time in history. “Around 16 percent of the entire budget will go to pensions and retirements,” he said.

No preferred choice for Morena leader. President López Obrador said he has no preferred candidate for Morena’s new leadership after Gibrán Ramírez, Porfirio Muñoz Ledo, Mario Delgado and Yeidckol Polevnsky registered for the position. After months of tension and ongoing disputes between groups looking to control the president’s party, López Obrador said he was grateful to all the people who founded Morena. “They did a heroic job. It was a feat to put aside the corrupt regime,” he noted.

 

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Click HERE for full transcript in Spanish

Ricardo Guzman Ricardo Guzman Editor