The IMF sees Mexico's economy growing 2.1% this year and 2.3% in 2019, according to comments from the Fund shared via the Bank of Mexico. "The IMF emphasized that policies and solid policy frameworks have helped Mexico navigate a complex external environment, and that perseverance with structural reforms is essential to boost growth and reduce poverty and inequality," the bank said. Better implementation of labor market regulations, the introduction of unemployment insurance, improvements to contributions to the pension system and the strengthening of the social security network could promote formal employment and help cut poverty, the IMF said. It also called for improving state oil company Pemex's financial position before it invests in building new refineries.
MEXICO CITY, Nov 8 (Reuters) - The International Monetary Fund (IMF) on Thursday called for an improvement in Mexican state oil company Pemex's financial position before it invests in building new refineries.
"A strengthening of Pemex's financial situation was a prerequisite to contemplating new investments in refining," the IMF said in a statement.
Mexico's incoming leftist government has vowed to build what could be the country's largest oil refinery, with construction set to begin as soon as next year. It says investment could be financed by Pemex.
Credit agency Fitch revised Mexico's rating outlook to negative on Oct. 31, citing "growing risks for contingent liabilities" for Mexico from Pemex.
"Proposals that Pemex invest in new refining capacity to substitute for gasoline imports would entail higher borrowing and larger contingent liabilities to the government," Fitch said at the time.
Fitch revised its outlook two days after President-elect Andres Manuel Lopez Obrador, who takes office on Dec. 1, said he would cancel a partly built new Mexico City airport in which billions of dollars have already been invested, pummeling the peso currency.
The IMF also called for "a continuation of the energy sector reform and private participation in the oil and gas sector to bring in necessary investment and boost production and growth."
Lopez Obrador opposed a constitutional change pushed through by Mexican President Enrique Pena Nieto that opened production and exploration in the energy sector to private capital.
Mexico has already awarded more than 100 oil exploration and production contracts to private companies, which Lopez Obrador has said he would respect as long as a review does not find evidence of corruption.IMF Warns About Uncertainty Over Lopez Obrador Policies
Lopez Obrador will take office on Dec. 1.