Tag Archives: Sarmiento

Top job at Central Bank as a consolation prize?

Columnist Sergio Sarmiento has put forward another reason for delaying until November picking a replacement for Carstens as Governor of Banco de México:  It will be a consolation prize for either Videgaray or Meade, if either of them is not chosen by President Peña Nieto to be the PRI’s candidate for 2018.   Continue reading

President blasts private sector over taxes

In two separate speeches, President Felipe Calderón vehemently attacked the private sector for its opposition to the fiscal program, alleging that the largest groups “rarely” paid taxes: “What seems to me unacceptable is that the giant corporations demand that the government cut spending, and the government cuts it; that they demand that the government tax food and medicine for the poorest, but … on average they pay only 1.7% in taxes. This cannot be! I am not asking for sacrifices. … I am asking that the companies also pay, even if just a part, of the taxes that the Mexican people need,” he said. Columnist Sergio Sarmiento said that Calderón’s ‘economic mentors’ seemed to be former Presidents Luís Echeverria and José López Portillo. Sarmiento also claimed that Calderón’s math was bad and that tax payments by large corporates were 26% of pre-tax income, “more than in other countries.” (Milenio 10/30, Reforma 11/2)

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)