The key features of the 1997 economic environment were as follows:
Gross Domestic Product of 7.1 percent; inflation at 15.7 percent ; and a current account deficit of 1.68 percent of GDP.
The strengthened and consolidated recovery of production and employment resulted in economic growth of 7.0 percent, which was much higher than originally targeted. The favourable rate of inflation was brought about by fiscal policy that shored up public finances and monetary policy that reflected market performance.
Mexico’s economic situation is widely known to have been affected by external factors that have produced slight temporary increases in interest rates and depreciation of the peso.
The balance of trade situation was the key factor behind the current account deficit of 1.68 percent.
Forecasts for 1998 will be more accurate if the following assumptions underlying economic policy are realized:
•Appropriate conditions for increased production activity and thus people’s purchasing power, through a vibrant export market, private and public investment and higher consumption.
•Consolidation of a broad and stable domestic savings base.
•Increased efficiency of the public and private productive sector and the social sector.
•Stricter control of public finances to reduce the operating deficit of the public sector.
We cannot ignore the fact that the Asian crisis will in some way complicate the domestic economic situation, so we shall have to work very closely with the relevant authorities to ensure there are no unfair trade practices related to imports from that part of the world, as these could seriously affect a sector as cyclical and sensitive as the paper industry.
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Macroeconomic results |
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|
Variables |
1997 |
1996 |
|
GDP |
7.1% |
5.1% |
|
Inflation |
15.7% |
27.7% |
|
Financial surplus or deficit (pesos) |
(1.68%)/ GDP |
(0.2)%/ GDP |
|
Monetary reserves* |
28 000 |
17 509 |
|
Trade balance* |
583 |
6 531 |
* Figures in million US$
The pulp and paper industry accounted for 2.2 percent of manufacturing GDP and 1.6 percent of industrial GDP. Pulp and paper GDP fell 4.1 percent from 1996.
Pulp production fell by 69 000 tons, which is 13.5 percent down from 1996. This fall concerned virtually all types of pulp produced in the country: long-fibre sulphate pulp, unbleached sulphate pulp, bleached other fibre pulp and mechanical pulp. In contrast, there were increases for thermo-mechanical pulp and short-fibre sulphate pulp.
As regards fibre consumption, the paper industry continued to use a mix of predominantly secondary fibres, which now account for 80.1 percent of total fibre consumption. The remaining 19.9 percent were virgin fibres.
The paper industry has introduced a number of measures to minimize environmental impact. The fact that the total paper output in 1997 of 3 492 000 tons used 3 264 000 tons of secondary fibres (80.1%) is particularly noteworthy. The remaining 19.9 percent of virgin fibres were made up as follows: 15.9 percent chemical wood pulp; 3.4 percent chemical other fibre pulp (bagasse from sugar-cane); and 0.6 percent mechanical pulp.
The use of secondary fibres in paper manufacture places Mexico among the world leaders in the recycling of paper.
The total paper production of 3 492 000 tons represents an increase of 8.5 percent over 1996. This was due to higher export sales and a slight recovery of the domestic market. Imports rose by 260 000 tons from 1996, representing a 35.4 percent increase. Apparent consumption was 15.7 percent up.
Production of the different paper grades was as follows:
Newsprint increased by 13.1 percent, with a total of 305 151 tons; other printing and writing paper increased by 15.6 percent, reaching a total of 622 804 tons. Total production of printing and writing paper, including newsprint, therefore amounted to 927 955 tons, which is 14.8 percent up from 1996.
Packaging increased by 2.9 percent to 1 945 000 tons. The highest rate of growth in this area was 6.0 percent for containerboard. Sanitary and facial tissues and household paper increased by 20.7 percent to 595 439 tons. Finally, speciality papers closed the year at 23 317 tons, down 13 percent.
There is no doubt that Mexico’s pulp and paper industry continues to be very sensitive to the international market situation, so we are keeping a close watch over the Asian crisis and its repercussions on our domestic market.
