Press Release: IMF Managing Director Rodrigo de Rato's Statement at the Conclusion of His Visit to Mexico
November 9, 2004
Mr. Rodrigo de Rato, Managing Director of the International Monetary Fund (IMF), issued the following statement on November 8 in Mexico City at the conclusion of his visit:
"I am very pleased to be in Mexico, where I have had many productive meetings. I was privileged to meet with President Vicente Fox, Presidente de la Junta de Coordinación Política del Senado Jackson, Chairman of the Board of the Lower Chamber Boltrones, Senate leader of the Partido Acción Nacional Fernández, Finance Secretary Francisco Gil Díaz, other senior government officials, Bank of Mexico Governor Ortiz and the Bank's Board, and business leaders.
"In my meetings with the Mexican authorities, we discussed the situation in Latin America and in the global economy. There is a clear sense that economic activity in the region is rebounding strongly this year, supported by a pickup in domestic demand and the robust global expansion, reinforced by the rising share of trade in GDP.
"Mexico has established a strong and credible macroeconomic policy framework based on prudent fiscal policy and debt management, a floating exchange rate, and inflation targeting. This has been supported by a high degree of integration with the world economy. The maturity of the multi-party political system and the vigor of the democratic process are also noteworthy. Institutions have also been strengthened in key areas such as central bank independence, and structural reforms have built a strong financial system.These achievements have been complemented by further progress in the areas of poverty alleviation, with improving social indicators over the past decade. The authorities' commendable, continuing determination to share the benefits of economic progress widely across society is crucial to ensure broad support for further forward momentum on sound economic policies.
"I was impressed by the determination of those that I met to build on these achievements, to sustain the recovery of growth and employment, while ensuring that policies result in an equitable sharing of the benefits of economic progress across society. In this context, I have had very useful discussions with President Fox and his team about their medium-term reform program, which is aimed at meeting these challenges while further reducing macroeconomic and financial vulnerabilities. Further strengthening of the fiscal position, including continued tax reform to reduce reliance on oil revenues, is an important part of the government's program. In this period of high oil prices, it is also critical to ensure that a substantial part is used to provide a cushion to protect high priority investment and social spending from future external shocks and, perhaps most importantly, to save oil wealth for future generations. In today's increasingly competitive world, broader reforms in energy, labor markets, judicial, and telecommunication sectors would unlock the growth potential of the Mexican economy. Congressional and business leaders—from different parties and sectors—have made clear that their aim is to see reforms deepened and accelerated to maintain Mexico's competitiveness and accelerate medium-term growth.
"In conclusion, I am optimistic Mexico will seize the opportunity now given by a benign external environment, and high oil prices, to build a consensus for structural reforms that are needed to sustain a higher growth path, create employment, and reduce poverty and inequality. We look forward to continuing our close policy dialogue and collaboration with Mexico in the years ahead."