Mexico needs investment to grow: Banxico – El Sol de México

For the country’s recovery to be more robust, investments are needed, says Alejandro Diaz de Leon Carrillo, Governor of the Bank of Mexico (Banxico).

“We expect the economy to grow by 6.2 percent this year. Although it has recovered greatly from the fall of the previous year, and we expect three percent growth for next year, I think those rates are recovering. What they lost last year,” he explains in an interview With mexico sun ITAM Economics.

“I would emphasize that if you want to grow faster, there is no economy that can have a sustainable period of growth that is not attracted by the investment process. Investment is mostly private and complementary public. In this sense, all that can contribute to an environment of greater investment in the country , greater adoption of technology, greater production capacity, adoption of new technologies, better training and qualification of the workforce, as well as taking advantage of the advantages that Mexico will have.”

In this sense, there is a huge advantage that stands out in these days of the Mexican epidemic that he earned a master’s degree in public and private administration from the Yale School of Management.

“The thing that leaves the Covid-19 virus, the highly stretched global supply chains and the policy of ‘just in time’ inventories, have shown themselves to be more vulnerable to this type of shock; which will make many companies want to have these operations near the destination markets, given the proximity of Mexico from the United States, will enhance its value as a strategic partner in industrial production for the United States.”

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Díaz de Leon is three months away from taking over as governor of Banxico, the institution where he began his career in 1991, but he refuses to talk about his future once his course at the Central Institute is over. “There will be time to absorb future projects.”

A Bank of Mexico official confirmed that transparency at the Central Institute allowed messages from the agency to be more “clear”.

The central bank governor has been criticized on more than one occasion by President Andres Manuel Lopez Obrador, who has accused, among other things, that the Bank of Mexico has little transparency on decision-making, particularly in relation to monetary policy.

In response, the Bank of Mexico began two months ago to make transparent the votes each of the governors’ deputy boards of directors in the monetary policy document, with the goal of having the institutional message prevail.

I would like to make it clear that the goal is to give a clearer and more comprehensive message. For three years, this intention to vote appeared in the minute that took place two weeks after the decision.

“There was a space between the decision and the minute, and at times it was more of a distraction than contributing to the institutional message, so we believe that by avoiding and defining those two weeks of uncertainty from the start, we have contributed to what the institutional message and monetary policy decision is and not necessarily the direction of the vote. It is prevalent.”

Diaz de Leon stresses that his attention remains focused on the responsibilities he assumes as Governor of the Bank of Mexico, before considering his departure from the organization.

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Alejandro Diaz de Leon will be Governor of the Central Institute until December 31, in a succession process where Arturo Herrera, the former Treasury Secretary, has been a candidate for president since June of this year.

The leader of the Bank of Mexico knows that the epidemic is not over, and for him, this is precisely the greatest danger to the economy.

Among the risks and challenges in the first place is the evolution of the epidemic. We have seen how in recent months, partly as a result of the delta variant and infection, the rate of recovery has waned. We hope that the downward trend in the number of infections will continue and that this stops hampering economic activity, but if it does not happen, it will be one of the risks, which is a dynamic associated with the epidemic.”

Amber Cross

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