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Roundup: Mexico's new finance minister warmly welcomed by public, private sectors

Xinhua, September 8, 2016 Adjust font size:

Mexico's new finance minister Jose Antonio Meade, named on Wednesday after Luis Videgaray stepped down, is well regarded by former President Vicente Fox (2000-2006), businessmen and bankers.

"I know Meade, he is a true person of money, finance, order, discipline, and government. He has the capacity. We have a great friend of mine here...I wish him the best," Fox told the press on Wednesday.

Meade had already served as minister of finance (2011-2012) under former President Felipe Calderon and was previously minister of foreign affairs under President Enrique Pena Nieto (2012-2015).

On Wednesday, Pena Nieto thanked Videgaray for his role in Mexico's economic reforms and for looking after the country's public finances.

The Mexican press has attributed Videgaray's resignation to his support for U.S. presidential candidate Donald Trump's recent visit to Mexico, which sparked a hostile reaction in the country.

However, this change in top financial officials may have come due to a run of recent bad news.

In late August, Mexico revised its GDP forecast for 2016 from 2.2 to 3.2 percent to 2 to 2.6 percent, with a weak demand from the United States, low oil prices and a slumping global economy sharing the blame.

The same month, Standard & Poor's lowered its rating for Mexico's sovereign credit outlook from stable to negative. This was sparked by the country's rising debt to GDP ratio, which reached 42 percent in 2015, is set to reach 45 percent this year before likely rising to 48 percent by 2018-2019.

Meade's appointment also came just one day after the federal government presented its 2017 budget proposal to Congress, with the Finance Ministry expected to make swinging public spending cuts to try to end 2017 with a budget surplus.

At the inauguration of an automotive plant on Wednesday, Economy Minister Ildefonso Guajardo said the president "is taking this decision...to support financial matters with someone who is already trusted."

Other sectors also joined government figures to express their support.

Carlos Serrano, chief economist at BBVA Bancomer, the largest financial insitution in Mexico, said that Meade's appointment was positive, "as someone who has already held the role, has deep knowledge of public finance, and will project a sense of calm to the markets."

A senior automotive industry leader also said Videgaray's exit would not cause uncertainty among the private sector.

"The Mexican private sector has an institutional agenda with the federal government, we will continue with that agenda. I do not see why a change of mandate would lead to any important changes in terms of economic proposals," Eduardo Solis, president of the Mexican Automotive Industry Association (Amia), said at another press conference. Enditem