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OECD lops growth rate forecast to just 0.5% for 2019 from May’s 1.6%

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Latest growth forecast reduction comes from the OECD.
In upgrading Mexico's GDP outlook for the rest of the year, the OECD noted that the the U.S. tariffs haven't yet had their full effect. (File Photo)

The Organization for Economic Co-operation and Development (OECD) has cut its 2019 growth forecast for Mexico to just 0.5% from an outlook of 1.6% in May.

Published on Thursday, the OECD Interim Economic Outlook noted that “GDP growth has slowed sharply in Mexico this year, in part due to temporary factors such as strikes and higher policy uncertainty.”

Strikes closed scores of factories in Tamaulipas in January, while a prolonged rail blockade by teachers in Michoacán during the same month cost the economy billions of pesos. The Mexican economy contracted by 0.3% in the first quarter of the year.

The 1.1% cut to Mexico’s 2019 growth outlook is among the biggest downgrades the OECD made to its individual country forecasts in the report.

The forecast for 2020 was not spared the axe either.

The outlook said that “lower interest rates, strong remittances and the increase in the minimum wage should help [Mexico’s] GDP growth to strengthen to 1.5% in 2020,” down 0.5% from the 2% economic expansion the OECD predicted in its May Economic Outlook.

The newspaper El Economista noted that the outlook for next year is also below the government’s 2% growth target, on which the 2020 Economic Package is predicated.

The OECD revision is the latest in a long line of downgrades to the 2019 outlook for the Mexican economy, which recorded 0.0% growth in the second quarter of the year.

The International Monetary Fund cut its growth forecast to 0.9% in July, a 0.7% reduction compared to its April outlook, while Mexico’s central bank slashed its economic expansion expectation in August to a range between 0.2% and 0.7% from a May prediction of 0.8% to 1.8%.

The OECD also cut its 2019 and 2020 outlooks for Mexico’s largest trading partner, the United States, in Thursday’s report. The U.S. economy will grow by 2.4% this year and 2% in 2020, the OECD said, forecasts that are 0.4% and 0.3% lower, respectively, than those it made in May.

The Paris-based organization also said that “global growth is projected to slow to 2.9% in 2019 and 3% in 2020,” adding that “these would be the weakest annual growth rates since the financial crisis, with downside risks continuing to mount.”

Source: El Economista (sp)

Lorena downgraded but hurricane watch in effect for Baja

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A beach in Jalisco after Lorena made landfall Thursday morning.
A beach in Jalisco Thursday morning.

Tropical storm Lorena strengthened to make landfall in Jalisco as a Category 1 hurricane early on Thursday, delivering torrential rain, strong winds and large swells to the Pacific coast of western and southern Mexico.

The system was downgraded soon after to a tropical storm but is expected to regain strength and a hurricane watch is now in effect for part of the Baja California peninsula.

The National Meteorological Service (SMN) said Lorena made landfall 13 kilometers to the east-northeast of Playa Pérula, Jalisco, at 4:00am.

The storm brought torrential rain, wind gusts in excess of 110 kilometers per hour and generated three to five-meter swells. The SMN warned that heavy rain could cause landslides and flash flooding.

The United States National Hurricane Center (NHC) said at 1:00pm CDT that Lorena was offshore about 100 kilometers northwest of Cabo Corrientes, Jalisco, and 415 kilometers southeast of Cabo San Lucas, Baja California Sur. Although the center of the storm is moving farther offshore, heavy rains continue along the southwestern coast of Mexico.

The storm is moving toward the northwest at 17 kilometers per hour but a turn to the west-northwest is expected tonight, the NHC said.

Lorena is forecast to regain hurricane strength in the next 24 hours and pass near or just south of the southern tip of the Baja California peninsula on Friday night.

A hurricane watch is in effect for the Baja California peninsula between La Paz and Santa Fe, while a tropical storm warning is in effect for Manzanillo, Colima, to Punta Mita, Nayarit, and the Baja peninsula between Los Barriles and Todos Santos.

The NHC said that coastal areas of the states of Michoacán, Colima and Jalisco can expect to receive 13-25 centimeters of rain over the next few days with maximum downpours of as much as 38 cm. The rain could produce life threatening flash floods and landslides.

Jalisco Governor Enrique Alfaro said on Twitter that Civil Protection services and the navy are attending to people in need but added that there have been no reports of loss of life. The Cuixmala river broke its banks in the municipality of La Huerta and flooded agricultural land, he said.

Baja California Sur Governor Carlos Mendoza Davis said that the state Civil Protection Council will meet in La Paz on Friday to monitor Lorena and advised residents to follow all instructions issued by authorities.

Source: Notimex (sp) 

Michoacán’s new C5 security center biggest in Latin America

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Inauguration ceremony inside Michoacán's new command center.
The inauguration ceremony held Wednesday inside Michoacán's new command center.

Federal and state authorities inaugurated a statewide security system in Michoacán on Wednesday that is the biggest of its kind in Latin America.

The C5-i system (short for Command, Communications, Computation, Control, Coordination and Intelligence) connects 11 sub-centers around Michoacán that allow authorities to monitor activities across the state.

Governor Silvano Aureoles told the inauguration ceremony in Morelia, the state capital, that he hopes to collaborate with the federal government on security policy through the C5-i.

“My government will not spare any cost to work and coordinate with the federal government on this strategy,” he said. “These installations are the result of a great effort that we have been making to address this complicated issue.”

He said he supports the deployment of 4,050 additional National Guard troops to Michoacán, but noted that state and municipal authorities also have a role to play in security.

“The National Guard itself has federal responsibilities, and will help us a lot in our local responsibilities,” he said. “But us, the municipal and state governments, need to do our part too.”

The governor also announced that one of the first tasks of the C5-i will be a pilot program to combat homicide.

“Learning from the experience of the anti-kidnapping program, we’re going to start a pilot program to fight homicide,” he said. “We’re also going to invest in the Attorney General’s Office, because it’s another vital part of any strategy against violence and impunity.”

Federal Public Security Secretary Alfonso Durazo praised the governor for his collaboration in creating the system.

“Governor Silvano Aureoles has been a great ally to the federal government in general, but today I want to recognize specifically his commitment to public security,” he said.

Durazo also thanked Michoacán business owners for agreeing to a tax increase of between 2% and 3% to pay for public security efforts.

The C5-i has 360 employees who monitor 18,250 emergency panic buttons in public places and over 6,000 security cameras around Michoacán.

Source: La Razón (sp), Reporte Índigo (sp)

Mexico City children’s hospital warns cancer drug shortage imminent again

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Drug manufacturer's permission to produce cancer medication has been suspended.
Drug manufacturer's permission to produce cancer medication has been suspended.

A Mexico City children’s hospital is warning yet again of a possible shortage of chemotherapy drugs.

The director of the Federico Gómez Children’s Hospital of Mexico (HIMFG) has warned lawmakers of an imminent shortage of the cancer drug methotrexate. But he claims that the federal health regulator has the capacity to provide an immediate solution to the problem.

During a meeting of the Senate Health Commission at the Mexico City hospital on Tuesday, Jaime Nieto Zermeño told senators, parents of children with cancer and federal health officials that the hospital’s supply of the chemotherapy agent will only last for the next two or three weeks.

However, he said, the pharmaceutical company PiSA could supply the drug to the hospital immediately if its authorization had not been stripped by the Federal Commission for Protection Against Sanitary Risk (Cofepris).

“PiSA . . . has the capacity to supply methotrexate the moment that the commission releases its certificate of good practice . . . The methotrexate problem can be solved so that the children who require the medication are not left without it,” Nieto said.

Cofepris suspended the authorization of a Jalisco-based PiSA subsidiary in May following a bacteria outbreak. But in a statement on August 27, the commission said that PiSA could sell and distribute methotrexate made before the suspension was imposed. Cofepris chief Alonso Novelo didn’t attend the Senate Health Commission meeting.

National Action Party (PAN) Senator Martha Márquez told the newspaper El Universal that the “revealing fact” that emerged from the meeting is that PiSA has the capacity to provide methotrexate but cannot supply it due to the Cofepris sanction.

“That’s why there’s a shortage because they’re the only ones that have produced [the drug],” she said.

Márquez said that directors of other hospitals are also concerned about the shortage of medications but are too afraid to speak out because they believe that doing so could result in them losing their jobs.

She said the National Cancer Institute and the Siglo XXI National Medical Center are among the health care facilities where there are “similar situations” to that in the HIMFG.

The PAN senator added that a Health Secretariat finance official revealed at the meeting that resources are not reaching Mexico’s health institutes as they did in the past.

“He explained that the Secretariat of Finance SHCP used to transfer money to the Health Secretariat after July . . . but we’re now almost in October and that hasn’t happened . . .”  Márquez said.

Medicine shortages reported in more than 20 states earlier this year were blamed on federal budget cuts to the health sector but Health Secretary Jorge Alcocer said in May that the problem had been “fixed” after the SHCP released more than 2 billion pesos in funding that had been withheld.

However, at a protest at the Mexico City airport in late August, parents of cancer patients said there had been no cancer drugs for 1 1/2 months at both the HIMFG and the 20 de Noviembre hospital.

With methotrexate supplies at the former hospital on the verge of running out and PiSA unable to replenish them, the father of a cancer patient receiving treatment at the HIMFG revealed at yesterday’s meeting that at his and other parents’ request, oncology director Luis Enrique Juárez Villegas asked Cofepris to approve an “extraordinary importation” of the drug.

However, the health regulator has not yet responded, Israel Rivas Bastidas said.

He urged Cofepris to reinstate PiSA’s authorization to produce and distribute methotrexate so that child cancer patients can continue to receive the chemotherapy treatment they need.

“A concrete fact is that PiSA has the medication but [the company] is sanctioned . . . If I were the government, I would allow PiSA to release the medications . . . to save the lives of the children.”

Source: El Universal (sp) 

Interjet suspends pilot who made ‘bomb-the-zócalo’ suggestion

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Pilot García has apologized for her remark.
Pilot García has apologized for her remark.

Proposing that a bomb be dropped on the Mexico City zócalo during the Independence Day ceremony didn’t go over well in many quarters, and particularly with the Mexican airline Interjet, which has suspended the pilot who made the remark.

The airline temporarily suspended pilot Alí Ximena García and another employee after the former issued the threat on Wednesday.

“A bomb should fall in the zócalo . . . it would help all of us out,” said García in a Facebook post.

Another Interjet employee, Gabriela García Orozco, commented on the post, saying, “I support you.”

In a press release, Interjet said the two employees have been temporarily suspended for further evaluations.

“With respect to the unfortunate statements made by two of our employees, we want to say that following our security protocols, we have temporarily removed them from the airline as we proceed with a series of evaluations,” the airline said.

Alí Ximena García later uploaded a video to Facebook apologizing for her statement.

“I sincerely regret the comment I made, it was an immature comment,” she said. “people who are close to me, my family, my friends, know that I am against violence. I want to offer a sincere apology to my company, which is a great company, to the president, to Mexico, to all the people I truly offended, from the bottom of my heart, I apologize.”

Source: El Financiero (sp)

Drought affecting 66% of country after rainfall down 19% this year

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Drought conditions are the worst in Veracruz and Oaxaca.
Drought conditions are the worst in Veracruz and Oaxaca.

Two-thirds of Mexico’s territory is in drought after almost 20% less rain than normal fell between January 1 and September 15, National Water Commission (Conagua) officials said on Tuesday.

Francisco Javier Aparicio Mijares, Conagua’s chief of engineering and binational water issues, told attendees at a meeting of the Droughts and Floods Inter-Secretarial Commission that 66.6% of the country was experiencing drought of varying degrees of severity at the end of August.

Six municipalities in the states of Oaxaca and Veracruz are currently afflicted by the worst drought conditions in the country, according to the drought monitor operated by the National Meteorological Service (SMN), a Conagua department.

SMN chief Jorge Zavala said that rainfall was down 19.3% in the first eight and a half months of the year in comparison with average levels, adding that drought conditions were exacerbated by record-breaking temperatures in August.

The SMN reported this week that the average nationwide temperature in August was 27 C, 3.3 degrees higher than normal.

drought map
Worst affected areas are shown in brown (exceptional conditions) and in red (extreme).

For his part, Conagua surface water chief Alfredo Ocón said that water levels in Mexico’s 206 primary reservoirs are on average 16% lower than is normally the case at this time of year.

During August and the first half of September, rainfall capture in 13 of the country’s 20 largest dams was more than 10% lower than average, he said.

Víctor Alcocer Yamanaka, a Conagua deputy director, said the deficit in Mexico’s main reservoirs added up to more than 13 million cubic meters of water, which he explained was the worst shortfall in the last five years.

He described the situation as “worrying” but added that water-saving measures are being implemented at a local level depending on the severity of the conditions faced.

Distribution via the massive Cutzamala system, which supplies water to Mexico City and parts of México state, has been reduced by 10% since September 12, Alcocer said.

He added that almost 102 million liters of water was trucked into 11 municipalities in Campeche, Coahuila, San Luis Potosí, Sinaloa, Sonora and Veracruz between September 10 and 16 in order to alleviate pressure on depleted local reservoirs.

Since the new federal government took office last December, Conagua tanker trucks have supplied water to 33 drought-affected municipalities in 12 states, the deputy director said.

Source: El Universal (sp) 

Tropical Storm Lorena strengthens, hurricane warning issued

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Lorena's forecast track as of 4:00pm Wednesday.
Lorena's forecast track as of 4:00pm Wednesday. Hurricane warning area is indicated in red. us national hurricane center

A hurricane warning is in effect between Punto San Telmo, Michoacán, and Cabo Corrientes, Jalisco, as Tropical Storm Lorena gains strength off the southwestern coast of Mexico.

The United States National Hurricane Center said at 4:00pm CDT on Wednesday that the storm was situated about 125 kilometers south of Manzanillo, Colima, and 310 kilometers south-southeast of Cabo Corrientes and moving toward the northwest.

It is expected to move near or over the coast within the hurricane warning area tonight and Thursday, after which it is forecast to move away from the coast late Thursday and Friday. Additional strengthening could take place at that point.

The storm could threaten southern Baja California Sur on the weekend as a hurricane, forecasters said, but the forecast remained uncertain due to the potential for land interaction Wednesday night and Thursday.

Heavy rain is expected in Guerrero, Michoacán, Colima and Jalisco over the next few days.

A tropical storm warning is in effect between Zihuatanejo, Guerrero, and Punta San Telmo and from Cabo Corrientes to Punta Mita, Nayarit.

Mexico News Daily

The Ayotzinapa prison exodus: Iguala’s once-imperial couple could be next

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The former mayor of Iguala and his wife prior to their arrest in 2014.
The former mayor of Iguala and his wife prior to their arrest in 2014.

The former mayor of Iguala, Guerrero, and his wife – the alleged masterminds of the abduction of the 43 students who disappeared and were presumably killed in 2014 – could soon be released from prison.

Only one federal criminal charge is keeping José Luis Abarca Velázquez and María de los Ángeles Pineda Villa in the Altiplano federal prison in México state and the federal women’s prison in Amacuzac, Morelos, respectively, the newspaper Milenio reported.

The ex-mayor and his wife, formerly known as the Imperial Couple of Iguala, have been exonerated of all other charges of which they were accused by prosecutors in the previous federal government.

Federal officials told Milenio that the one outstanding accusation against the couple is a 2017 charge relating to participation in organized crime and operations with resources of illicit origin.

Abarca and Pineda were both allegedly complicit with the Guerreros Unidos crime gang which, according to the previous government’s “historical truth,” killed the 43 students and burned their bodies in a municipal dump.

The charge against the couple, however, is based on testimony from three witnesses whose declarations were ruled invalid by a Tamaulipas-based judge because they were obtained through the use of torture.

Gildardo López Astudillo, who was allegedly the Guerreros Unidos plaza chief in Iguala at the time of the students’ disappearance, other gang members and 24 municipal police officers suspected of involvement in the case were recently released from prison because judges ruled that the evidence against them was obtained by illegal means, including torture.

An application for the release of Abarca and Pineda on the same grounds will be made in the coming days, Milenio said.

The newspaper also reported that a state-based charge against the former mayor for involvement in the 2013 abduction and murder of Arturo Hernández Cardona, who was the leader of the Democratic Revolutionary Party in Guerrero, is “hanging by a thread.”

Four other people accused of the crime have already been released from prison due to a lack of evidence.

Human rights undersecretary Alejandro Encinas said on September 4 that the release of López Astudillo set a “grave precedent” that could lead to other suspects in the Iguala case being freed, while this week he charged that the acquittal and release of municipal police officers detained in connection with the disappearance of the students was a sign of the “wretchedness and rot” of Mexico’s justice system.

Encinas said that Judge Samuel Ventura Ramos had made “a mockery of justice” by absolving the officers and warned that Abarca could also be exonerated for his alleged involvement in the disappearance of the 43 students of the Ayotzinapa Rural Teachers College.

Source: Milenio (sp) 

US fuel exporters turn to trucks to get product into Mexico

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More gasoline is being shipped to Mexico by road.
More gasoline is being shipped to Mexico by road.

United States companies that sell fuel to Mexico are relying more and more on trucking to meet Mexico’s gasoline requirements amid shortcomings with other transportation methods.

Although trucking is less efficient and more expensive than rail, pipeline or maritime shipping, certain factors make it a good solution for U.S. exporters.

One of the companies that is trucking gasoline across the border is Mexico City-based Indimex Marketing and Trading. In an interview with Bloomberg, Indimex founder Rajan Vig said that Mexico’s geography makes trucking a good option.

“Given the fact that Mexico is a wide-spanning country, it is much easier to move product via truck,” he said. “Trucking is efficient. People understand the viable routes for trucking. Some areas of the country are just much easier to truck to, rather than to rail to.”

Mexico has long been dependent on the United States for gasoline and other refined petroleum products. In spite of being a net petroleum exporter, Mexico’s limited refining capabilities mean that it needs to turn to the United States to cover demand. In 2018, Mexico spent almost US $19 billion importing an average of about 600,000 barrels of gasoline a day.

The 2014 energy reform allowed the opening of gas stations not owned by the state oil company for the first time. The first private gas stations in Mexico opened in 2016 and now account for a large part of the fuel market, and are allowed to import fuel from private suppliers.

But strict import regulations and Pemex’s monopoly on distribution networks mean private gas stations are still supplied for the most part by the state oil company.

However, Pemex has faced a host of distribution problems, which is pushing private gas station operators to look for other foreign suppliers, former Pemex official Josefa Casas said at an energy conference in Mexico City last week.

“The supply crisis at the start of this year accelerated to some extent the need for a guarantee of supply and private companies began to look for alternative solutions,” she said.

However, Casas noted that trucking is relatively expensive and volume-limited compared to other shipping methods, and that Mexico should improve its port and rail infrastructure.

“Infrastructure remains limited, but that’s also an opportunity for investment,” she said.

Source: Bloomberg (en), El Economista (sp)

Sale of presidential plane will pay for municipal water improvements

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Its sale will mean water service in Hidalgo.
Its sale will mean improved water service for a community in Hidalgo.

The sale of the presidential plane will help fund a reliable water service for Zacualtipán, Hidalgo, President López Obrador told residents of the municipality on Tuesday.

The president made the commitment during a visit to the rural hospital in Zacualtipán, where residents complained that they only receive water once every 20 days, a situation that forces them to store water or purchase it from tanker trucks known as pipas.

“As soon as you hear that the presidential plane has been sold, [you can] start thinking that support to resolve the water problem will arrive soon,” López Obrador told the residents.

The plane, a luxurious Boeing 787 Dreamliner purchased in 2012 and delivered in 2014, is currently at the Southern California Logistics Airport as the government attempts to find a buyer for it.

López Obrador, who travels on commercial flights, said the aircraft cost 7 billion pesos (US $360.5 million at today’s exchange rate), which he calculated was 350 times more than Zacualtipán’s annual budget of 20 million pesos.

“. . . The presidential plane cost 350 years of Zacualtipán’s budget. Three and a half centuries!” the president remarked.

In June, he said the plane’s sale would help finance programs for migrants seeking asylum in the United States.

During the hospital visit, López Obrador also pledged that during his six-year term, the government will upgrade the highway between Zacualtipán, located about 100 kilometers north of Pachuca in the Sierra region of Hidalgo, and Huejutla, a municipality in the north of the state on the border with Veracruz.

Finance Secretary Arturo Herrera will ensure that sufficient resources are allocated to the project, he said.

Source: Notimex (sp)