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LatinNews Daily - 31 October 2018

In brief: Mexico

* Mexico’s economy minister, Ildefonso Guajardo, has denied that the decision to cancel the Nuevo Aeropuerto Internacional de Méxcio (NAIM) infrastructure project will provoke an economic crisis in Mexico. Markets reacted badly to the announcement by President-elect Andrés Manuel López Obrador that his incoming administration will abandon the US$13.3bn NAIM project once it assumes office on 1 December, with the value of the Mexican peso falling by 4.2% against the US dollar. Business leaders also criticised a decision which they say will dent investor confidence in the country. Eduardo Osuna, general director of BBVA Bancomer bank, said in a press conference that the cancellation was a “bad decision” which would lead to less investment, higher exchange rates, and a spike in inflation that would have a negative impact on Mexico’s GDP. Carlos Serrano, chief economist at BBVA Bancomer, predicted that the central bank (Banxico) would have to raise interest rates to stop capital flight. According to local media, López Obrador has set up a commission comprising the future head of his presidential office, Alfonso Romo, as well as the future transport & communications minister, Javier Jiménez Espriú, and the future finance finance, Carlos Urzúa, who will work to regain the trust of business leaders in a series of meetings starting on 31 October.

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