MEXICO CITY (Reuters) – Mexico’s government presented an almost $14 billion infrastructure investment plan on Monday as President Andres Manuel Lopez Obrador seeks to repair rocky relations with business leaders and lift the struggling economy.
The package, mostly privately financed, is the first clear sign of corporate bosses’ readiness to invest under Lopez Obrador since the coronavirus pandemic this spring plunged Latin America’s second-biggest economy into its biggest slump since the Great Depression.
Ranging from the revival of a planned train link between Mexico City and the central city of Queretaro to investments for state oil firm Petroleos Mexicanos (Pemex), it comprises some 39 projects, the government said.
Unveiling the plan, worth over 297 billion pesos ($13.83 billion), at a news conference, Lopez Obrador extended a hand to corporate bosses, striking a conciliatory tone.
“We have no problem with business leaders. On the contrary, they deserve our utmost respect and admiration because they invest, generate jobs and create welfare,” he said alongside some of Mexico’s most prominent industry chiefs.
Since taking power nearly two years ago, Lopez Obrador has had a choppy relationship with business, angering companies and allies of Mexico by threatening to tear up contracts worth billions of dollars signed under the previous government.
The leftist Lopez Obrador insists that past governments were permeated by corruption and skewed the economy in favor of private interests, particularly in the energy sector.
The resulting chill in investor confidence that set in helped to tip Mexico into a mild recession in 2019 before the pandemic battered the global economy.
This year, leading forecasters expect Mexico’s economy to contract by up to 10% or more, though Lopez Obrador has kept a tight rein on public purse strings to avoid going into debt.
Industry sources familiar with discussions on the projects said the president is increasingly conscious that he needs private sector investment to realize his economic goals.
Monday’s investment package, which is to be largely funded by private capital, was the first of what business leaders say should be a series of investment announcements.
The initial batch should create some 185,000-190,000 jobs, said Jorge Nuno, a senior finance ministry official.
Among the biggest projects listed were plans to improve the refining potential of Pemex, which Lopez Obrador has put at the center of his drive to create a more mixed economy.
($1 = 21.4730 Mexican pesos)
(Reporting by Mexico City newsroom; Editing by Grant McCool)
TORONTO – Canada’s main stock index was higher in late-morning trading, helped by strength in energy stocks, while U.S. stock markets also moved up.
The S&P/TSX composite index was up 34.91 points at 23,736.98.
In New York, the Dow Jones industrial average was up 178.05 points at 41,800.13. The S&P 500 index was up 28.38 points at 5,661.47, while the Nasdaq composite was up 133.17 points at 17,725.30.
The Canadian dollar traded for 73.56 cents US compared with 73.57 cents US on Monday.
The November crude oil contract was up 68 cents at US$69.70 per barrel and the October natural gas contract was up three cents at US$2.40 per mmBTU.
The December gold contract was down US$7.80 at US$2,601.10 an ounce and the December copper contract was up a penny at US$4.28 a pound.
This report by The Canadian Press was first published Sept. 17, 2024.
OTTAWA – Canada’s inflation rate fell to two per cent last month, finally hitting the Bank of Canada’s target after a tumultuous battle with skyrocketing price growth.
The annual inflation rate fell from 2.5 per cent in July to reach the lowest level since February 2021.
Statistics Canada’s consumer price index report on Tuesday attributed the slowdown in part to lower gasoline prices.
Clothing and footwear prices also decreased on a month-over-month basis, marking the first decline in the month of August since 1971 as retailers offered larger discounts to entice shoppers amid slowing demand.
The Bank of Canada’s preferred core measures of inflation, which strip out volatility in prices, also edged down in August.
The marked slowdown in price growth last month was steeper than the 2.1 per cent annual increase forecasters were expecting ahead of Tuesday’s release and will likely spark speculation of a larger interest rate cut next month from the Bank of Canada.
“Inflation remains unthreatening and the Bank of Canada should now focus on trying to stimulate the economy and halting the upward climb in the unemployment rate,” wrote CIBC senior economist Andrew Grantham.
Benjamin Reitzes, managing director of Canadian rates and macro strategist at BMO, said Tuesday’s figures “tilt the scales” slightly in favour of more aggressive cuts, though he noted the Bank of Canada will have one more inflation reading before its October rate announcement.
“If we get another big downside surprise, calls for a 50 basis-point cut will only grow louder,” wrote Reitzes in a client note.
The central bank began rapidly hiking interest rates in March 2022 in response to runaway inflation, which peaked at a whopping 8.1 per cent that summer.
The central bank increased its key lending rate to five per cent and held it at that level until June 2024, when it delivered its first rate cut in four years.
A combination of recovered global supply chains and high interest rates have helped cool price growth in Canada and around the world.
Bank of Canada governor Tiff Macklem recently signalled that the central bank is ready to increase the size of its interest rate cuts, if inflation or the economy slow by more than expected.
Its key lending rate currently stands at 4.25 per cent.
CIBC is forecasting the central bank will cut its key rate by two percentage points between now and the middle of next year.
The U.S. Federal Reserve is also expected on Wednesday to deliver its first interest rate cut in four years.
This report by The Canadian Press was first published Sept. 17, 2024.
FREDERICTON – New Brunswick‘s finance minister says the province recorded a surplus of $500.8 million for the fiscal year that ended in March.
Ernie Steeves says the amount — more than 10 times higher than the province’s original $40.3-million budget projection for the 2023-24 fiscal year — was largely the result of a strong economy and population growth.
The report of a big surplus comes as the province prepares for an election campaign, which will officially start on Thursday and end with a vote on Oct. 21.
Steeves says growth of the surplus was fed by revenue from the Harmonized Sales Tax and federal money, especially for health-care funding.
Progressive Conservative Premier Blaine Higgs has promised to reduce the HST by two percentage points to 13 per cent if the party is elected to govern next month.
Meanwhile, the province’s net debt, according to the audited consolidated financial statements, has dropped from $12.3 billion in 2022-23 to $11.8 billion in the most recent fiscal year.
Liberal critic René Legacy says having a stronger balance sheet does not eliminate issues in health care, housing and education.
This report by The Canadian Press was first published Sept. 16, 2024.
