Mexico says flu outbreak to dent 2009 growth
(Adds quotes, details on government plan and byline)
By Luis Rojas Mena
MEXICO CITY, May 5 (Reuters) - The flu outbreak in Mexico could knock up to half a percentage point off the country's economic growth this year, the government said as it promised tax relief and emergency financing to affected companies.
"It's having a big impact on our economy," Finance Minister Agustin Carstens said on Tuesday.
Mexico was already in recession due to a collapse in U.S.-bound exports. Now its tourism industry is being savaged by the flu epidemic which has killed at least 26 people in Mexico and two in the United States.
Also, in a temporary hit on economic activity, Mexico shut down factories, offices and restaurants for five days beginning May 1, though the government has since said the worst of the H1N1 flu epidemic is past.
Businesses will begin reopening nationwide on Wednesday, but the outlook for the tourism sector, which accounts for roughly 8 percent of the economy, is still unclear.
"Flights were canceled (and) those that are arriving are just picking up people and not bringing new visitors -- especially the foreign flights," Carstens told Mexican radio.
Speaking earlier at a news conference, Carstens said the government will offer measures such as tax relief to affected companies, costing the country a total of 17.4 billion pesos ($1.3 billion), as well as more than 10 billion pesos in emergency financing from Mexican development banks.
Those measures include a cut in airport taxes paid by airlines in an effort to boost tourism, he later said.
"We think these are adequate measures due to the emergency, given that its duration has been short and it hasn't been that deep of an impact," Carstens said.
The flu outbreak will likely shave between 0.3 to 0.5 percentage points off Mexico's gross domestic product this year, and the government could lose out on 10 billion pesos ($752 million) in taxes from the disruption caused by the flu, Carstens said.
The government expects Mexico's economy to shrink up to 4 percent this year because of a collapse in demand for Mexican exports in the United States.
Private sector forecasts have been growing more grim, however. Credit Suisse said on Tuesday Mexico's economy will probably contract by 6 percent this year. ($1=13.30 pesos) (Additional reporting by Jason Lange and Michael O'Boyle; Editing by Diane Craft)
By Luis Rojas Mena
MEXICO CITY, May 5 (Reuters) - The flu outbreak in Mexico could knock up to half a percentage point off the country's economic growth this year, the government said as it promised tax relief and emergency financing to affected companies.
"It's having a big impact on our economy," Finance Minister Agustin Carstens said on Tuesday.
Mexico was already in recession due to a collapse in U.S.-bound exports. Now its tourism industry is being savaged by the flu epidemic which has killed at least 26 people in Mexico and two in the United States.
Also, in a temporary hit on economic activity, Mexico shut down factories, offices and restaurants for five days beginning May 1, though the government has since said the worst of the H1N1 flu epidemic is past.
Businesses will begin reopening nationwide on Wednesday, but the outlook for the tourism sector, which accounts for roughly 8 percent of the economy, is still unclear.
"Flights were canceled (and) those that are arriving are just picking up people and not bringing new visitors -- especially the foreign flights," Carstens told Mexican radio.
Speaking earlier at a news conference, Carstens said the government will offer measures such as tax relief to affected companies, costing the country a total of 17.4 billion pesos ($1.3 billion), as well as more than 10 billion pesos in emergency financing from Mexican development banks.
Those measures include a cut in airport taxes paid by airlines in an effort to boost tourism, he later said.
"We think these are adequate measures due to the emergency, given that its duration has been short and it hasn't been that deep of an impact," Carstens said.
The flu outbreak will likely shave between 0.3 to 0.5 percentage points off Mexico's gross domestic product this year, and the government could lose out on 10 billion pesos ($752 million) in taxes from the disruption caused by the flu, Carstens said.
The government expects Mexico's economy to shrink up to 4 percent this year because of a collapse in demand for Mexican exports in the United States.
Private sector forecasts have been growing more grim, however. Credit Suisse said on Tuesday Mexico's economy will probably contract by 6 percent this year. ($1=13.30 pesos) (Additional reporting by Jason Lange and Michael O'Boyle; Editing by Diane Craft)
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