Mexico’s Fox to Unveil Belt-Tightening Steps

Mexican President Vicente Fox said his administration will unveil a series of belt-tightening measures late this week to brace government finances, as the local economy slows in tandem with that of its chief trading partner, the United States.

Fox said, however, the measures to be made public would not signal a state of emergency for Mexico, whose economy, he said, expanded at a 2% annual pace in the first three months of 2001 after growing 5.1% in the final quarter of 2000.

“There is no emergency here,” Fox told reporters Friday as he boarded a plane bound for Mexico City in Washington, where he met with President Bush on Thursday. “The economy is more solid than ever.”

He noted interest rates and inflation had fallen in his first five months in power. Despite the slower growth rate, Fox said the economy enjoyed a “credibility” that was the envy of other nations.

In his comments on Friday, Fox declined to detail the new austerity measures, although local newspapers quoting administration officials traveling with the president said they included selling off unprofitable state companies, paring government spending and battling corruption.

The measures, however, will not include large layoffs of public servants, Fox said.