Keep Us Strong WikiLeaks logo

Currently released so far... 97115 / 251,287

Articles

Browse latest releases

Browse by creation date

Browse by origin

A B C D F G H I J K L M N O P Q R S T U V W Y Z

Browse by tag

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
ETRD EAGR ETTC EAID ECON EFIN ECIN EINV ELAB EAIR ENRG EPET EWWT ECPS EIND EMIN ELTN EC ETMIN EUC EZ ET ELECTIONS ENVR EU EUN EG EINT ER ECONOMICS ES EMS ENIV EEB EN ECE ECOSOC EK ENVIRONMENT EFIS EI EWT ENGRD ECPSN EXIM EIAD ERIN ECPC EDEV ENGY ECTRD EPA ESTH ECCT EINVECON ENGR ERTD EUR EAP EWWC ELTD EL EXIMOPIC EXTERNAL ETRDEC ESCAP ECO EGAD ELNT ECONOMIC ENV ETRN EIAR EUMEM ENRGPARMOTRASENVKGHGPGOVECONTSPLEAID EREL ECOM ECONETRDEAGRJA ETCC ETRG ECONOMY EMED ETR ENERG EITC EFINOECD EURM EENG ERA EXPORT ENRD ECONEINVETRDEFINELABETRDKTDBPGOVOPIC EGEN EBRD EVIN ETRAD ECOWAS EFTA ECONETRDBESPAR EGOVSY EPIN EID ECONENRG EDRC ESENV ETT EB ENER ELTNSNAR ECHEVARRIA ETRC EPIT EDUC ESA EFI ENRGY ESCI EE EAIDXMXAXBXFFR EETC ECIP EIAID EIVN EBEXP ESTN EING EGOV ETRA EPETEIND ELAN ETRDGK EAIDRW ETRDEINVECINPGOVCS EPEC ENVI ELN EAG EPCS EPRT EPTED ETRB EUM EAIDS EFIC EFINECONEAIDUNGAGM EAIDAR ESF EIDN ELAM EDU EV EAIDAF ECN EDA EXBS EINTECPS ENRGTRGYETRDBEXPBTIOSZ EPREL EAC EINVEFIN ETA EAGER EINDIR ECA ECLAC ELAP EITI EUCOM ECONEFINETRDPGOVEAGRPTERKTFNKCRMEAID EARG ELDIN EINVKSCA ENNP EFINECONCS EFINTS ECCP ETC EAIRASECCASCID EINN ETRP EAIDNI EFQ ECOQKPKO EGPHUM EBUD ECONEINVEFINPGOVIZ ENERGY ELB EINDETRD EMI ECONEFIN EIB EURN ETRDEINVTINTCS EIN EFIM ETIO ELAINE EMN EATO EWTR EIPR EINVETC ETTD ETDR EIQ ECONCS EPPD ENRGIZ EISL ESPINOSA ELEC EAIG ESLCO EUREM ENTG ERD EINVECONSENVCSJA EEPET EUNCH ECINECONCS ETRO ETRDECONWTOCS ECUN EFND EPECO EAIRECONRP ERGR ETRDPGOV ECPN ENRGMO EPWR EET EAIS EAGRE EDUARDO EAGRRP EAIDPHUMPRELUG EICN ECONQH EVN EGHG ELBR EINF EAIDHO EENV ETEX ERNG ED
KMDR KPAO KPKO KJUS KCRM KGHG KFRD KWMN KDEM KTFN KHIV KGIC KIDE KSCA KNNP KHUM KIPR KSUM KISL KIRF KCOR KRCM KPAL KWBG KN KS KOMC KSEP KFLU KPWR KTIA KSEO KMPI KHLS KICC KSTH KMCA KVPR KPRM KE KU KZ KFLO KSAF KTIP KTEX KBCT KOCI KOLY KOR KAWC KACT KUNR KTDB KSTC KLIG KSKN KNN KCFE KCIP KGHA KHDP KPOW KUNC KDRL KV KPREL KCRS KPOL KRVC KRIM KGIT KWIR KT KIRC KOMO KRFD KUWAIT KG KFIN KSCI KTFIN KFTN KGOV KPRV KSAC KGIV KCRIM KPIR KSOC KBIO KW KGLB KMWN KPO KFSC KSEAO KSTCPL KSI KPRP KREC KFPC KUNH KCSA KMRS KNDP KR KICCPUR KPPAO KCSY KTBT KCIS KNEP KFRDCVISCMGTCASCKOCIASECPHUMSMIGEG KNNB KGCC KINR KPOP KMFO KENV KNAR KVIR KDRG KDMR KFCE KNAO KDEN KGCN KICA KIMMITT KMCC KLFU KMSG KSEC KUM KCUL KMNP KSMT KCOM KOMCSG KSPR KPMI KRAD KIND KCRP KAUST KWAWC KTER KCHG KRDP KPAS KITA KTSC KPAOPREL KWGB KIRP KJUST KMIG KLAB KTFR KSEI KSTT KAPO KSTS KLSO KWNN KPOA KHSA KNPP KPAONZ KBTS KWWW KY KJRE KPAOKMDRKE KCRCM KSCS KWMNCI KESO KWUN KPLS KIIP KEDEM KPAOY KRIF KGICKS KREF KTRD KFRDSOCIRO KTAO KJU KWMNPHUMPRELKPAOZW KEN KO KNEI KEMR KKIV KEAI KWAC KRCIM KWCI KFIU KWIC KCORR KOMS KNNO KPAI KBWG KTTB KTBD KTIALG KILS KFEM KTDM KESS KNUC KPA KOMCCO KCEM KRCS KWBGSY KNPPIS KNNPMNUC KWN KERG KLTN KALM KCCP KSUMPHUM KREL KGH KLIP KTLA KAWK KWMM KVRP KVRC KAID KSLG KDEMK KX KIF KNPR KCFC KFTFN KTFM KPDD KCERS KMOC KDEMAF KMEPI KEMS KDRM KEPREL KBTR KEDU KNP KIRL KNNR KMPT KISLPINR KTPN KA KJUSTH KPIN KDEV KTDD KAKA KFRP KWNM KTSD KINL KJUSKUNR KWWMN KECF KWBC KPRO KVBL KOM KFRDKIRFCVISCMGTKOCIASECPHUMSMIGEG KEDM KFLD KLPM KRGY KNNF KICR KIFR KM KWMNCS KAWS KLAP KPAK KDDG KCGC KID KNSD KMPF KPFO KDP KCMR KRMS KNPT KNNNP KTIAPARM KDTB KNUP KPGOV KNAP KNNC KUK KSRE KREISLER KIVP KQ KTIAEUN KPALAOIS KRM KISLAO KWM KFLOA
PHUM PINR PTER PGOV PREL PREF PL PM PHSA PE PARM PINS PK PUNE PO PALESTINIAN PU PBTS PROP PTBS POL POLI PA PGOVZI POLMIL POLITICAL PARTIES POLM PD POLITICS POLICY PAS PMIL PINT PNAT PV PKO PPOL PERSONS PING PBIO PH PETR PARMS PRES PCON PETERS PRELBR PT PLAB PP PAK PDEM PKPA PSOCI PF PLO PTERM PJUS PSOE PELOSI PROPERTY PGOVPREL PARP PRL PNIR PHUMKPAL PG PREZ PGIC PBOV PAO PKK PROV PHSAK PHUMPREL PROTECTION PGOVBL PSI PRELPK PGOVENRG PUM PRELKPKO PATTY PSOC PRIVATIZATION PRELSP PGOVEAIDUKNOSWGMHUCANLLHFRSPITNZ PMIG PREC PAIGH PROG PSHA PARK PETER POG PHUS PPREL PS PTERPREL PRELPGOV POV PKPO PGOVECON POUS PGOVPRELPHUMPREFSMIGELABEAIDKCRMKWMN PWBG PMAR PREM PAR PNR PRELPGOVEAIDECONEINVBEXPSCULOIIPBTIO PARMIR PGOVGM PHUH PARTM PN PRE PTE PY POLUN PPEL PDOV PGOVSOCI PIRF PGOVPM PBST PRELEVU PGOR PBTSRU PRM PRELKPAOIZ PGVO PERL PGOC PAGR PMIN PHUMR PVIP PPD PGV PRAM PINL PKPAL PTERE PGOF PINO PHAS PODC PRHUM PHUMA PREO PPA PEPFAR PGO PRGOV PAC PRESL PORG PKFK PEPR PRELP PREFA PNG PGOVPHUMKPAO PRELECON PINOCHET PFOR PGOVLO PHUMBA PRELC PREK PHUME PHJM POLINT PGOVPZ PGOVKCRM PGOVE PHALANAGE PARTY PECON PEACE PROCESS PLN PRELSW PAHO PEDRO PRELA PASS PPAO PGPV PNUM PCUL PGGV PSA PGOVSMIGKCRMKWMNPHUMCVISKFRDCA PGIV PRFE POGOV PEL PBT PAMQ PINF PSEPC POSTS PHUMPGOV PVOV PHSAPREL PROLIFERATION PENA PRELTBIOBA PIN PRELL PGOVPTER PHAM PHYTRP PTEL PTERPGOV PHARM PROTESTS PRELAF PKBL PRELKPAO PKNP PARMP PHUML PFOV PERM PUOS PRELGOV PHUMPTER PARAGRAPH PERURENA PBTSEWWT PCI PETROL PINSO PINSCE PQL PEREZ PBS

Browse by classification

Community resources

courage is contagious

Viewing cable 07MEXICO2670, MEXICAN ECONOMY SLOWS IN FIRST QUARTER

If you are new to these pages, please read an introduction on the structure of a cable as well as how to discuss them with others. See also the FAQs

Understanding cables
Every cable message consists of three parts:
  • The top box shows each cables unique reference number, when and by whom it originally was sent, and what its initial classification was.
  • The middle box contains the header information that is associated with the cable. It includes information about the receiver(s) as well as a general subject.
  • The bottom box presents the body of the cable. The opening can contain a more specific subject, references to other cables (browse by origin to find them) or additional comment. This is followed by the main contents of the cable: a summary, a collection of specific topics and a comment section.
To understand the justification used for the classification of each cable, please use this WikiSource article as reference.

Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol). Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #07MEXICO2670.
Reference ID Created Released Classification Origin
07MEXICO2670 2007-05-24 19:43 2011-08-25 00:00 UNCLASSIFIED Embassy Mexico
VZCZCXRO5937
PP RUEHCD RUEHGD RUEHHO RUEHMC RUEHNG RUEHNL RUEHRD RUEHRS RUEHTM
DE RUEHME #2670/01 1441943
ZNR UUUUU ZZH
P 241943Z MAY 07
FM AMEMBASSY MEXICO
TO RUEHC/SECSTATE WASHDC PRIORITY 7142
INFO RUEHXC/ALL US CONSULATES IN MEXICO COLLECTIVE
RHEHNSC/NSC WASHDC
RHMFIUU/CDR USSOUTHCOM MIAMI FL
RHMFIUU/CDR USNORTHCOM
RUEHC/DEPT OF LABOR WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RHEBAAA/DEPT OF ENERGY WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHDC
UNCLAS SECTION 01 OF 03 MEXICO 002670 
 
SIPDIS 
 
SIPDIS 
SIPRNET 
 
STATE FOR A/S SHANNON 
STATE FOR WHA/MEX, WHA/EPSC, EB/IFD/OMA, AND DRL/AWH 
STATE FOR EB/ESC MCMANUS AND IZZO 
USDOC FOR 4320/ITA/MAC/WH/ONAFTA/GERI WORD 
USDOC FOR ITS/TD/ENERGY DIVISION 
TREASURY FOR IA (ALICE FAIBISHENKO) 
DOE FOR INTERNATIONAL AFFAIRS KDEUTSCH AND ALOCKWOOD 
NSC FOR DAN TOMLINSON, RICHARD MILES, DAN FISK 
STATE PASS TO USTR (EISSENSTAT/MELLE) 
STATE PASS TO FEDERAL RESERVE (CARLOS ARTETA) 
 
E.O. 12958: N/A 
TAGS: ECON EFIN PINR PGOV MX
SUBJECT: MEXICAN ECONOMY SLOWS IN FIRST QUARTER 
 
 
------- 
Summary 
------- 
 
1. (SBU)  The Mexican economy is showing signs of slower 
growth, with the forecast for real GDP growth around 3.2% for 
2007, down from 4.8% last year.  In the first quarter of the 
year, the Mexican economy grew at its slowest rate in more 
than a year, in part due to the slower pace of the U.S. 
economy.  Most economists agree that Mexico can weather a 
gradual U.S. slowdown, at least temporarily, but that its 
economy is too closely linked to that of the U.S. for it to 
escape unscathed.  Slower growth in the U.S. weakens demand 
for Mexican goods in the U.S. -- the destination of 85% of 
Mexico's exports.  In the fourth quarter of last year and the 
first quarter of 2007, export growth to the U.S. tailed off 
from the double-digit quarterly growth rates registered from 
the beginning of 2004 until the third quarter of 2006.  The 
weakened demand is most notable in the manufacturing sector, 
which accounts for more than 80% of Mexico's total exports. 
The automobile sector in particular has suffered, with 
vehicle production down 12.4% in the first quarter compared 
with the first quarter of 2006.  Finance Secretariat 
officials have said that Mexico is better positioned to 
weather a U.S. slowdown than it was in the past because of 
stronger macroeconomic fundamentals and domestic demand. 
While this is true, it is the Calderon government's ability 
to diversify the economy and tackle much-needed economic 
reforms that will determine the country's future success. 
End Summary. 
 
------------------------------- 
U.S. Slowdown Dampens Growth... 
------------------------------- 
 
2. (U) The Mexican economy is showing signs of slower 
economic growth, with the forecast for real GDP growth around 
3.2% for 2007, down from 4.8% last year.  In the first 
quarter of the year, the Mexican economy grew at its slowest 
pace in more than a year, largely because of a drop off in 
automobile output and construction.  Real GDP expanded 2.6% 
from a year earlier, down sharply from the 4.3% growth 
registered in the fourth quarter of 2006. 
 
3. (U) A key factor behind this subdued performance is the 
slower pace of the U.S. economy, which only grew 1.3% in the 
first three months of the year.  Most economists agree that 
Mexico can weather a moderate, gradual U.S. slowdown, but 
that its economy is too closely linked to that of the U.S. 
for it to escape unscathed.  Slower growth in the U.S. 
weakens demand for Mexican goods in the U.S., the destination 
of 85% of Mexico's exports, according to Mexican trade 
statistics.  In the fourth quarter of last year and the first 
quarter of 2007, export growth to the U.S. tailed off to 8% 
and 2%, respectively, over the same quarters a year before. 
These rates compare unfavorably with double-digit quarterly 
growth rates from the beginning of 2004 until the third 
quarter of 2006.  The weakened demand is most notable in the 
manufacturing sector, which accounts for more than 80% of 
Mexico's total exports.  Industrial production rose only 0.2% 
in March, after growing 0.1% in February and 1.5% in January. 
 The automobile sector in particular has suffered, with 
vehicle production down 12.4% in the first quarter compared 
with the first quarter of 2006.  April saw a rebound of 11% 
over the same month in 2006, but it is still too early to 
project the beginning of a complete recovery.  That said, 
auto output is expected to increase over the next 5 years as 
Asian companies continue to grow and efficiency pressures 
push the Big 3 (Ford, GM, and Chrysler) to expand production 
in Mexico.  However, a decrease in the U.S. demand for 
automobiles produced in Mexico would hurt the already 
weakened manufacturing sector. 
 
 
MEXICO 00002670  002 OF 003 
 
 
--------------------------------------------- - 
...But Mexico More Resilient Than in the Past 
--------------------------------------------- - 
 
4. (SBU) Finance Secretariat (Hacienda) officials have said 
publicly and privately that Mexico is better positioned to 
weather a U.S. slowdown than it was in the past because of 
stronger macroeconomic fundamentals and domestic demand. 
Mexico's fiscal deficit and public debt ratios are down, and 
inflation has fallen to around 4%.  Bond spreads are at 
record lows, and the current account deficit is manageable. 
Reynoso told econoff that the floating exchange rate has 
helped, but he noted that the real difference is that now a 
depreciation of the peso does not hit wages. 
 
5. (SBU) Marco Oviedo Cruz, Hacienda's Director of Financial 
Planning (strictly protect), told econoff that domestic 
growth will act as a counterweight to the expected decline in 
exports.  While domestic demand cannot permanently stave off 
a downturn, Oviedo Cruz said it can act as a buffer for 2-3 
quarters.  He added that the increase in credit to the 
private sector, particularly loans to homebuyers, and the 
likely decline of domestic yields would help propel domestic 
consumption.  The Managing Director to the President on 
Strategy at the Mexican Stock Exchange, Alejandro Reynoso 
(strictly protect), added that another important factor is 
the government's ability to maintain a modest fiscal deficit. 
 Oviedo Cruz and Reynoso both said a prolonged U.S. slowdown 
would be more harmful to Mexico than a short, steep downturn. 
 
 
6. (SBU) Oviedo Cruz and Reynoso agreed that a decline in oil 
prices would not have a significant impact on Mexico's 
economy.  Oil only represents a small component of total GDP, 
and revenue shortfalls could be covered by slightly 
increasing the deficit and reducing government spending. 
Oviedo Cruz said that oil prices are more of a concern for 
public finances, which would eventually affect domestic 
growth.  HSBC's chief Mexico economist noted that he is more 
concerned about the impact of falling oil production than he 
is about oil prices. 
 
------- 
Comment 
------- 
 
7. (SBU) A stronger, more dynamic economy will help Mexico 
weather the U.S. slowdown, but the Calderon administration's 
ability to diversify the economy and pass much-needed 
structural reforms are key to the country's international 
competitiveness and future success.  The government is overly 
dependent on volatile oil prices and must to find ways to 
direct more investment into the state-owned energy company to 
keep production levels from falling.  Bank lending has 
increased, but financing for agriculture and small- and 
medium-sized businesses remains scarce.  To improve Mexico's 
competitiveness, foreign investors and many experts on Mexico 
also have called on the government to reform the labor code, 
improve respect for rule of law, encourage competition in 
sectors dominated by only a few firms, and improve the 
quality of the educational system. 
 
8. (SBU) On the positive side, prospects for economic reform 
have improved since the Calderon administration took office 
last December, due largely to the President's political 
dexterity and the Finance Secretary's strong negotiating 
skills.  The government passed a major pension reform for 
public sector workers earlier this year, and fiscal reform is 
in the works.  Separately, Hacienda officials expect the 
economy to pick up pace in the second half of the year as the 
U.S. economy recovers.  End Comment. 
 
 
 
MEXICO 00002670  003 OF 003 
 
 
Visit Mexico City's Classified Web Site at 
http://www.state.sgov.gov/p/wha/mexicocity and the North American 
Partnership Blog at http://www.intelink.gov/communities/state/nap / 
BASSETT