Mexico's AMLO Scraps $13 Billion Airport Project; Peso Plunges
- Lopez Obrador has said he will respect result of consultation
- Canceling now could cost as much as $10.5 billion, BBVA says
Incoming Mexican President Andres Manuel Lopez Obrador, the leftist who calmed investors with his initially market-friendly approach, ditched a $13 billion airport project backed by some of the nation’s wealthiest businessmen, sparking a rout in stocks, bonds and the currency.
Lopez Obrador scrapped the project after almost 70 percent of 1.07 million people who participated in a national referendum voted against the airport, among the nation’s biggest infrastructure projects. The peso tumbled past 20 to the dollar, erasing all gains since Lopez Obrador was elected on July 1. Analysts at BBVA said the decision could put pressure on the central bank to raise rates. JPMorgan Chase & Co. analysts cut their 2019 forecast for Mexican growth to 1.9 percent from 2.4 percent.