State assets to be sold
The government plans to start selling state-owned assets by the end of the year to reduce its debts, with a stake in oil and gas major Eni top of the list, two sources familiar with the matter said. “We want to start soon. We want to sell some of the assets by the end of the year to show we are doing something,” one source with direct knowledge of the matter said. According to the company’s Web site, the Treasury holds a 4.3 percent stake in Eni, the biggest company listed on the Milan stock exchange. The stake is worth about 2.8 billion euros (US$3.9 billion) at current market prices. A sale would be an easy and quick way for the government to pocket money to cut the country’s public debt, which is hovering stubbornly at about 133 percent of GDP.
Main interest rate slashed
The central bank slashed its main interest rate on Friday, the third cut this year to counter weakening growth in Latin America’s second-biggest economy. The bank reduced its interbanking rate from 3.75 percent to 3.5 percent, following a reduction last month and another in March, which had marked the first cut since 2009. However, the central bank said in a statement that it did not expect more cuts “in the foreseeable future.” The government has drastically reduced its growth forecast for this year, from 3.5 percent to 1.7 percent, following a disappointing economic performance in the first half of the year. The economy shrank by 0.74 percent in the second quarter compared with the first three months of the year, posting the first quarterly contraction since the 2009 global financial crisis. The central bank said the economy “started to show a budding recovery” in the third quarter, but “the risks for lower economic activity in Mexico, while lower than before, remain high.”
US$1bn a week lost: NEPAD
The continent loses nearly US$1 billion every week through illicit financial flows out of the continent, and chiefly through transactions by multinational companies, an African Union agency said on Friday. The New Partnership for Africa’s Development (NEPAD), an African Union policy wing, said in a statement that the world’s poorest region lost US$900 billion in the illegal financial flows between 1970 and 2008. Commercial transactions by multinationals accounted for 60 percent of the unlawful flows, followed by criminal activities, such as trade in drugs, weapons and people at 35 percent. Bribery and embezzlement made up 5 percent. Channels for the illegal flows were trade mispricing, investment-related transactions and offshore tax havens.
Pemex posts US$3bn loss
Mexico’s state oil giant Pemex Friday posted a massive US$3 billion third quarter loss, citing lower export volumes, falling fuel prices and a negative foreign exchange amid a controversial push for energy reform. The monopoly’s sharp loss compared to a profit of US$1.87 billion in the same period last year, according to a company filing with the Mexican stock exchange. Pemex, which funds about 40 percent of the government coffers, reported US$31.46 million in sales in the July to September period, a 0.1 percent increase from last year.