Mexico: Large, Immediate Negative Impact and Weak Medium-Term Growth Prospects
Table 8A.8. Supply-Side Growth Projections (annual average growth rates, %) 2003–07
2008 2009 2010f 2011f 2012f 2013f
2014f 2012–15f
GDP
3.3
1.5
–6.5
2.5
2.8
3.0
3.0
3.0
3.0
GDP per worker
2.3
0.0
–8.0
1.3
1.6
1.8
1.9
2.0
1.9
Capital stock per worker
1.5
–0.2
–3.0
–1.0
0.3
1.0
1.1
1.3
1.1
Trend TFP growth
1.8
0.0
–6.2
1.6
1.4
1.5
1.5
1.5
1.5
Source: Author’s estimates. Note: f = forecast.
Notes 1. For a more thorough discussion of these issues, see Haber (2005) and Murillo (2005). 2. The opposite had been done through a unilateral decision of the Mexican government in the mid-1980s. 3. See Esquivel and Hernández Trillo (2009) on the first issue and Lehoucq and others (2005) on the second. 4. See Faal (2005) and García-Verdú (2007) and the references cited therein. 5. See, for example, the study summarized in IMF (2009a). 6. There are several alternative methods. See, for instance, Acevedo (2009) and Faal (2005) for other applications to the Mexican case. We also tried a production function approach, but our estimates were too sensitive to the specification. 7. Our data on TFP are based on the Penn World Tables 6.2 and have been updated to 2007 by staff at the World Bank’s Latin America and the Caribbean Region Chief Economist’s Office. We have completed these data until 2009 using domestic sources. Owing to data limitations, these estimates do not take into account either capacity utilization or human capital information. 8. At the end of 2008, the banking sector accounted for 60 percent of total domestic credit to the private sector and about 45 percent of total credit (internal and external). More importantly, the banking sector represented almost 75 percent of Mexico’s total increase in credit between 2006 and 2008. 9. Of course, this does not mean that the international credit crunch is not playing a role in this trend. Since most of the banks operating in Mexico are now foreign owned, their decisions have a global dimension. Therefore, some banks could have received instructions from their owners to reduce their credit lines in order to boost their overall capital ratios.
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