A bill to boost bank lending in Mexico would have an immediate impact on the economy, helping to boost growth as soon as next year, Deputy Finance Minister Fernando Aportela said.
The bill encourages development banks to work more closely with the financial industry to lift lending, which reached only 26 percent of gross domestic product last year, Aportela said today at the Bloomberg Mexico Conference in New York. Aportela said he expects the reform bill, which was presented in May, to be debated in special lower house congressional sessions in August.
Mexico’s commercial bank lending as a percentage of GDP is the lowest among Latin American nations, according to the most recent data from the International Monetary Fund. President Enrique Pena Nieto’s reform proposals, which also include measures targeting the energy industry and taxes, would lift growth by at least one percentage point, Aportela said.
“We’re trying to have in our package elements to accelerate” the impact on the economy, Aportela said. “We’re expecting to feel the effects of the financial reform, if we get approval by Congress, during 2014.”
The Finance Ministry’s forecast on growth remains 3.1 percent for this year, subject to change based on activity in the second half, Aportela said.
Economists see 2013 gross domestic product rising 2.7%, the slowest pace since the 2009 recession, according to a July 5 bi-weekly survey by Citigroup Inc.’s Banamex unit.
The deputy said Mexico’s floating exchange rate and high level of reserves are working “well” to buffer the nation’s economy from market volatility triggered by speculation the U.S. will dial back stimulus.
The peso weakened 0.3 percent to 12.9359 per dollar at 2:14 p.m. in Mexico City, while three-month historical volatility reached a 17-month high of 13.2 percent, the most among major Latin American nations. Historical volatility is a measure of the magnitude of the peso’s fluctuations during the period.