Fox Says Economy Hurt by External Factors

Mexican President Vicente Fox said on Monday that the nation’s economy has not met the government’s original growth targets due to external factors such as the Sept. 11 attacks on the United States.

“We promised to reach high rates of growth but external factors have crushed our liftoff and forced us to make adjustments,” Fox said in a speech to the 12th stock market convention.

“The deceleration of the world economy’s engines and the recessionary effects of terrorism have put everyone in a difficult position,” Fox said, noting that Mexico was no exception.

When he took power last December, Fox vowed to achieve economic growth of 7.0% by the second half of his six-year term.

The government predicted 4.5% growth for this year but that target has been successively slashed.

The central bank is now projecting that the nation’s economy will not grow at all this year and will contract in the third quarter.

That view is backed by private analysts.

In 2000, gross domestic product grew a vigorous 6.9% but it began slowing at the end the year.

It has since slowed to flat growth in the second quarter of this year with the economy getting hit hard by the downturn in the United States, Mexico’s main trading partner, which buys 85% of its exports.

Following the attacks, analysts have chopped their forecasts further for Mexico’s near to medium-term economic outlook.

Fox said the government had taken measures aimed at strengthening the economy and “achieving the growth rates the country needs.”

“Sustained growth can only be guaranteed if it is founded in the savings that we generate ourselves,” Fox said. “The financial sector and stock market will play a vital role in this process.”