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Mexico & Nafta - February 2010 (ISSN 1741-444X)

In denial

On 27 January the Banco de México published more optimistic forecasts for the economy in 2010. The central bank, however, failed to comment on data which showed that poverty is increasing, nor on the parlous state of the public finances. This combination of rising needs and an already stretched state suggests that whatever policy choices the government makes will have little immediate success reducing social problems. The huge security problem the government faces may well be a result of the underlying social problems. These are thus likely, because of government spending cuts and tax rises, to become worse before becoming better.

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