Thread: Mexican Presidential Aide Sees 600,000 New Jobs In 2006

http://www.thebusinessonline.com

Mexican Presidential Aide Sees 600,000 New Jobs In 2006

MEXICO CITY -(Dow Jones)- A chief aide to Mexican President Vicente Fox said Tuesday that the government's economic growth estimate for this year of 3.6% to 3.7% should translate into the creation of about 600,000 new jobs.

Eduardo Sojo, who heads the presidential office of public policy, said the rule of thumb that every percentage point increase in gross domestic product leads to about 100,000 jobs in the formal economy hasn't worked out in recent years.

He noted that with GDP growth last year expected at 3%, 576,000 more workers were registered with the Mexican Social Security Institute.

Growth is being generated in labor intensive activities such as commerce and services, "so our expectation is that in 2006 it will translate into about 600,000 jobs," he said.

Sojo reiterated that the lack of reforms in areas such as energy and labor laws have been the main drag on growth in the current administration, rather than slower than expected growth in the U.S.

"The fault of the lack of growth lies in Mexico, I would say in the Congress," he said.

The official added that the Fox administration, which ends its six-year term in December, will continue to push for reforms throughout 2006.

He said that it's more likely Congress could pass reforms, a number of which are politically sensitive, after the July 2 elections during the period of transition when Fox's successor will be known.

July voting will also be for members of the lower house of Congress and the Senate, where since 1997 no one party has held a majority.

-By Anthony Harrup, Dow Jones Newswires; (5255) 5080-3450; anthony.harrup@dowjones.com



(END) Dow Jones Newswires

January 24, 2006 10:15 ET (15:15 GMT)

http://today.reuters.com

UPDATE 2-Mexico economy to grow 3.6-3.7 pct in 2006-gov't
Tue Jan 24, 2006 10:07 AM ET



(Adds background)

MEXICO CITY, Jan 24 (Reuters) - Mexico's economy is expected to grow between 3.6 and 3.7 percent this year, a senior presidential aide said on Tuesday, in a slightly more optimistic outlook than the government's recent budget forecast.

"The forecast for 2006 ... is between 3.6 and 3.7 percent," said Eduardo Sojo, the president's public policy coordinator.

President Vicente Fox had forecast annual growth of 3.6 percent for 2006 when he submitted a budget proposal late last year.

Mexico's finance ministry and central bank expect the economy to grow about 3.5 percent in 2006, up from 3 percent in 2005.

For two years, private consumption and government spending have kept the economy growing, albeit slowly, while industrial activity has sagged, particularly in the key manufacturing sector.

while there are signs of a bounce-back in manufacturing, spending by Mexican consumers is expected to be a key factor this year in sustaining a nascent economic recovery.

Data on Monday showed retail sales were flat in November, but analysts brushed off the figures, saying liberal spending by political parties ahead of presidential elections in July should keep consumption healthy.

Mexicans have been confidently buying consumer durables like furniture, televisions and washing machines in recent months, often attracted by offers of paying in installments as retailers target low-income customers.

Analysts do not expect consumption to be strong enough to stir inflationary pressure in Mexico, where 12-month inflation at the end of December was at 3.33 percent, the lowest full-year rate since records began being kept 37 years ago.

Consumer price data due later on Tuesday for the first half of January was expected to show a rise of 0.24 percent, according to the median of a Reuters poll <MEX17>. That would push the 12-month inflation rate slightly higher