Finance Secretary under fire

The publication Mexican GDP figures – a decline of 8.2% in the first quarter – and another reduction in GDP estimates for 2009 (to -5.5%) is undercutting the standing of Finance Secretary Agustín Carstens. The Bajo Reserva column asks,

“Who is making the official estimates [for GDP growth], and how is it possible to have a correction of 6 percentage points in GDP forecasts in only 15 weeks? …No other economy has had to make such a correction of this magnitude in its forecasts. It would seem that the management of numbers … is not a strong point of this Government.”

Two of the most sober columnists, Leo Zuckermann and Sergio Sarmiento, had columns on the same day questioning Carstens’ effectiveness, with both quoting his February 2008 statement about the impact of the U.S. economic recession on Mexico:

“I am confident that it will not give us pneumonia. I expect that it will give us a cold.”

Sergio Sarmiento, who has long been a critic of the adequacy of economic policy, noted:

“Today nobody talks of a ‘cold’ except in jest. If we want to continue with the metaphor, I imagine that the U.S. is suffering from an atypical pneumonia while Mexico is suffering from a case of H1N1 flu that hasn’t been treated in time.” (Reforma 5/22)

Leo Zuckermann catalogs all of Carstens’ statements about the economy from February 2008 on, along with the steady reduction in GDP expectations from 4% growth to the current forecast of a 5.5% contraction.

“I understand that the Finance Secretary is providing an optimistic vision of the economy in order to not deepen the economic fear. However, I believe that Carstens has abused optimism to the detriment of realism. He has consistently erred in his forecasts, and with this he has lost the credibility that a serious secretary of finance has to have. Taking into account Carstens’ past performance, can we truly believe that the Mexican economy will only fall 5.5% in 2009? (Excelsior 5/22)

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