Carstens Says Mexican Drug Violence Blunting Economic Growth Eric Martin and Brendan Case - Bloomberg News
go to original October 21, 2014

Banco de Mexico Governor Agustin Carstens speaks during an interview in Mexico City on Oct. 20, 2014. (Susana Gonzalez/Bloomberg)

Mexican central bank Governor Agustin Carstens said drug-related violence is damping growth, hours after federal police took over security in 13 towns following the alleged massacre of students in Guerrero state.

“There is no doubt that violence has been a negative factor,” Carstens, 56, said in an interview at Bloomberg’s Mexico City office. “This is a problem that Mexico has been tackling for the last few years. It’s a deeply-rooted problem.”

Carstens cited a central bank analyst survey published Oct. 3 that showed public security problems as the top obstacle to Mexico’s economic expansion, followed by fiscal policy, weak domestic demand and international financial instability. The bank unexpectedly cut its benchmark rate to a record-low 3 percent in June to bolster growth that has missed economists’ forecasts in seven of the past nine quarters.

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