MEXICO CITY--Mexico registered a moderate current account deficit in 2012, as its first trade surplus in 15 years and transfers from Mexicans working abroad offset deficits in interest payments and services.
The Bank of Mexico said Monday that the country registered a $9.25 billion current account deficit last year, equivalent to 0.8% of gross domestic product. The deficit was similar to the $9.67 billion deficit in 2011.
Mexico had a trade surplus last year of $163 million, its first since 1997. Remittances fell 1.6% to $22.45 billion, while the country had a $19.03 billion deficit in rents, most the result of interest payments abroad.
The current account deficit in the fourth quarter was $6.49 billion. In a recent report, the Bank of Mexico estimated that the current account deficit will widen in 2013 to $17.3 billion, equivalent to 1.3% of gross domestic product, including a $5.5 billion trade deficit. The bank is predicting that the economy will expand between 3% and 4% this year.
"The moderate deficit expected in the current account, abundant global liquidity, as well as actions taken by federal government to finance its foreign debt obligations, suggest there won't be any problems in financing the deficits and that this won't be a cause of pressure on the exchange rate," the central bank said.
Foreign direct investment in Mexico was a negative $909 million in the fourth quarter, bringing the total for 2012 to $12.66 billion compared with $21.5 billion in 2011. Mexican direct investment abroad was $25.6 billion last year.
Foreign portfolio investment last year reached $73.38 billion, with $46.64 billion invested in Mexican government bonds, and $10.22 billion in the stock market.
The central bank said that foreign direct investment was negatively affected by Spanish-owned Grupo Financiero Santander Mexico's (BSMX, SANMEX.MX) sale of a 25% stake in the bank.
Since most of the $4.1 billion in shares were sold to foreigners, the inflow of portfolio investment offset most of the outflow of foreign direct investment, the central bank added.
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The Bank of Mexico said Monday that the country registered a $9.25 billion current account deficit last year, equivalent to 0.8% of gross domestic product. The deficit was similar to the $9.67 billion deficit in 2011.
Mexico had a trade surplus last year of $163 million, its first since 1997. Remittances fell 1.6% to $22.45 billion, while the country had a $19.03 billion deficit in rents, most the result of interest payments abroad.
The current account deficit in the fourth quarter was $6.49 billion. In a recent report, the Bank of Mexico estimated that the current account deficit will widen in 2013 to $17.3 billion, equivalent to 1.3% of gross domestic product, including a $5.5 billion trade deficit. The bank is predicting that the economy will expand between 3% and 4% this year.
"The moderate deficit expected in the current account, abundant global liquidity, as well as actions taken by federal government to finance its foreign debt obligations, suggest there won't be any problems in financing the deficits and that this won't be a cause of pressure on the exchange rate," the central bank said.
Foreign direct investment in Mexico was a negative $909 million in the fourth quarter, bringing the total for 2012 to $12.66 billion compared with $21.5 billion in 2011. Mexican direct investment abroad was $25.6 billion last year.
Foreign portfolio investment last year reached $73.38 billion, with $46.64 billion invested in Mexican government bonds, and $10.22 billion in the stock market.
The central bank said that foreign direct investment was negatively affected by Spanish-owned Grupo Financiero Santander Mexico's (BSMX, SANMEX.MX) sale of a 25% stake in the bank.
Since most of the $4.1 billion in shares were sold to foreigners, the inflow of portfolio investment offset most of the outflow of foreign direct investment, the central bank added.
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