Spotlight: Mexican economists call for structural reform amid bleak economic outlook

Mexico should carry out structural reform to strengthen the weak domestic market instead of blaming its bleak economic outlook on external factors, said economists.

Mexico's growth forecast for 2016 has been revised down to about 2 percent by credit rating agency Fitch and the International Monetary Fund.

The Mexican Central Bank also lowered its forecast in August, blaming external factors, such as global financial turmoil, and weaker industrial activity in the United States.

Mexican analysts, however, say much can be done at home to revive the economy.

Violeta Rodriguez del Villar, a professor at Mexico's National Autonomous University (UNAM), believes the country needs to strengthen policies designed to redistribute wealth and invest in human capital to bolster the domestic market.

Mexico should "take better advantage of its production capacity and properly exploit its wealth of natural resources, in addition to seeking to produce more competitive goods and developing geographic areas to exploit, including in space," Rodriguez told Xinhua.

While external factors have played a role in dampening the economy, a strong domestic market could help buffer the country from global fluctuations, she said.

Jorge Lomeli Morales, an economist of La Salle University in Mexico City, believes the problem largely lies in superficial and shortsighted thinking.

Decision-makers "have not diagnosed in depth what is wrong, what type of cancer there is. Nor have they thought of a long-term project ... they are only coming up with the medication to treat any situation in the short term," said Lomeli.

Countries such as South Korea, Japan and China "are not performing miracles," but are taking small steps in the right direction, said Lomeli.

"We don't have anything like that, something to mark the way for us, (to indicate) these are the goals, these are the targets and the way to reach them is this."

Mexico's economy has languished in recent years, registering 1.35 percent growth in 2013, 2.2 percent in 2014 and 2.5 percent in 2015.

Gabriela Siller, head economic-financial analyst at Banco Base financial group, expects growth this year to ring in at 1.9 percent, even lower than the IMF and Bank of Mexico projections.

Given the poor growth outlook, Siller said Mexico should try to reduce its public deficit by cutting back on government expenses.

In late August, credit rating agency Standard & Poor's (S&P) lowered Mexico's long-term outlook from "stable" to "negative," citing the government's ballooning public debt, which amounted to 42 percent of GDP in 2015, and is expected to grow to 45 percent in 2016 and 48 percent in the 2018-2019 period.

At a press conference on Wednesday on the release of the IMF's 2016 Fiscal Monitor report, the director of the agency's Fiscal Affairs Department, Vitor Gaspar, recommended Mexico establish an independent fiscal council to help reduce its public debt.

"It could have a closer link between deficit targets and debt objectives. And it could invest further in its fiscal rules framework in order to make sure that the necessary (fiscal) flexibility in the short run would come together with a well-anchored public debt path from a longer term perspective," said Gaspar.

"The IMF very much emphasizes the authorities' commitment to a gradual reduction in the fiscal deficit, and we link that with the importance for Mexico to interrupt the increases in the public debt-to-GDP ratio," Gaspar added.

Siller, of Banco Base, agreed, saying that would be a good measure for Mexico. Endi