The Guadalajara Reporter

Peso slips as economy shows encouraging signs

The peso closed at a six-month low Thursday as the euro-zone debt crisis, combined with lackluster U.S. economic forecasts, continued to hit currencies in emerging economies across the globe.

By the close of markets the peso was quoted at 14.01 to the dollar.

As it has done many times since 2009 when the peso has been under pressure, the central bank (Banco de Mexico) intervened Thursday to sell dollars to prop up the currency.

Banco de Mexico Governor Agustin Carstens said recently that the peso’s recent slide is a result of external factors, and not symptomatic of any hiccups in the economy.

On the contrary, he said the nation’s GDP would grow by four percent in 2012, and register a second consecutive annual increase.

At the beginning of the year, financial experts estimated the economy would grow by 3.25 percent this year.

While the election campaign in the United States will focus mainly on the domestic economy, Mexico’s electorate may not be voting so much with their pocketbooks but more with an eye as to what the future political and social  landscape will be like if – as expected – the Institutional  Revolutionary Party (PRI) return to power after 12 years in opposition.

From an economic perspective, however, a PRI victory will almost certainly mean that the stalled  labor, fiscal and energy reforms that many economists believe the country urgently requires  to remain competitive, will be fast-tracked into law.