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Mexico needs to boost industrial output

Staff Writer |
Mexico needs to boost its industrial output to improve its low economic growth and increasing public debt, economic experts told Xinhua.

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Jorge Sanchez Tello, a researcher from the Foundation for Financial Studies (FUNDEF) at the Autonomous Technological Institute of Mexico (ITAM), explained that while certain sectors, such as telecoms and services, are growing at three percent, others are anemic.

"One sector is dragging down the economy, the extractive sector, such as oil and mining. Mining, in particular, has fallen by almost 10 percent in the last quarter," he said.

This week, the government reduced its growth estimates for 2016 from 2.2-3.2 percent to just 2-2.6 percent, citing global financial volatility and low industrial demand from the U.S. This would mark the fourth year of low growth for Mexico after 1.35 percent in 2013, 2.2 percent in 2014 and 2.5 percent in 2015.

However, Abraham Vergara, a professor of business studies from Ibero-American University, stated the government should not seek to blame external problems alone.

According to Vergara, the government has not created enough jobs to meet internal needs, having only created 2.1 million jobs in the last three years, instead of the 4.5 million the country needed.

"True, there is a difficult international context but it' s not the only reason. We cannot put all the blame on outside," said the expert.

Vergara also warned of Mexico potentially being trapped in a dangerous cycle of low growth and high debt, which could lead to a recession.


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