Mexico's new finance minister vows fiscal calm, hews to surplus target

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Mexico's new finance minister, Arturo Herrera, vowed to extend the tight fi...

MEXICO CITY - Mexico’s new finance minister, Arturo Herrera, vowed to extend the tight fiscal grip exerted by his predecessor, moving to restore calm after the stormy departure of his former boss from the cabinet of President Andres Manuel Lopez Obrador.

“The most important anchor point of fiscal policy for this year is a primary surplus of 1%,” he said. “It’s most likely that for next year we will have a similar number.”Urzua resigned on Tuesday with a letter that shocked Mexico, as well as investors around the world. By naming Urzua’s protege, Herrera, to the top job within an hour of the former’s resignation, Lopez Obrador stemmed a sell-off in Mexican assets that saw the peso fall as much as 2% and the stock market drop 1.4%.

Despite his comments on fiscal discipline, Herrera made clear he was also on board with Lopez Obrador’s expansive infrastructure plans, and vowed to stay in the post until asked to leave. “But in light of the unusual content of Urzua’s resignation letter there is out there the lingering question of who is ultimately in charge of running economic policy.”Despite winning appreciation for holding down spending and debt, Urzua’s seven months in office were marked by a sovereign debt downgrade and contracting economic growth as he stuck to fiscal targets while setting aside money to support Pemex and Lopez Obrador’s plans for a new oil refinery.

Announcing Herrera’s appointment, Lopez Obrador said Urzua had been uncomfortable with decisions upending what the president frequently calls Mexico’s neoliberal era, dating from the 1980s.

 

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