although the manufacturing sector grew at 18 % and 15 % respectively in the preceding two years, decline in its growth rate is notable. the performance of this sector is impacted by some of the structural issues typical of pakistan ’ s manufacturing sector. manufacturing sector is now beginning to slowly diversify and modernize itself. presently, almost three - fourths of the production stems from the large - scale manufacturing sector. the key contributor is the textile and apparel group, though chemicals, petroleum, engineering, tyres and tubes, fertilizers, cement, and automobile and durable white goods are adding capacities and are likely to boost industrial production. sme policy and enhanced flow of credit for this segment would eventually enhance the linkages of this sector. macroeconomic sustainability : after a consistent reduction in macroeconomic imbalances over fy00 - 04, the fiscal and external current account deficits have been above targeted levels for fy06 and are likely to be in that range in fy07. most notable is the concern regarding trade deficit that is to range around $ 8. 2 billion in fy06. 7 almost 45 % of the increase in trade deficit for fy06 stemmed from the rise in import bill for crude oil and petroleum products. demand pressures are likely to grow further as the government accelerates social and infrastructure programs, and segments of population and businesses benefit from the fy07 fiscal package. infrastructure sector programs, while ambitious, are absolutely needed as businesses are set to grow, capacities are being enhanced, new industries and sectors are being opened up and development of industrial parks and additional epzs are in the offing. after a span of price stability, pakistan continues to face inflationary pressures that emerged in late 2004 in response to an accommodative monetary policy. thus far effective monetary management and administrative measures to ease product supplies have controlled inflation which is now well within single digits. with demand pressures expected to grow, sbp will continue to pursue monetary tightening but there will be need to strike an appropriate balance between promoting economic growth as reported by statistics department, state bank of pakistan and price stability. over the medium term, pakistan is well positioned to deal with these emerging trends effectively. while the consumption demand would remain high, there are strong indications that investment has picked up – though perhaps not fully captured by national accounts statistics. rising investment demand is confirmed by : first, the rise in gross fixed capital formation over the last two years by 29. 6 % in

manuel sanchez : mexico – economic integration, challenges and outlook remarks by mr manuel sanchez, deputy governor of the bank of mexico, at the united states - mexico chamber of commerce, california regional chapter, los angeles, 5 august 2016. * * * it is certainly a pleasure to be back in los angeles to share my views with you on mexico ’ s economic prospects. i would like to thank the california regional chapter of the united states - mexico chamber of commerce for the kind invitation. i will organize my presentation in three parts. first, i will briefly discuss mexico ’ s growing and very dynamic partnership with the united states. i will follow with a focus on growth and financial developments for the mexican economy, in conjunction with these close ties. and finally, i will make some comments on inflation and monetary policy in mexico. as usual, my remarks are entirely my own and do not necessarily reflect the position of the bank of mexico or its governing board. economic integration with the u. s. a natural starting point for this discussion is the tight relationship between our two countries. mexico is increasingly linked to the united states, through high levels of bilateral exports and imports, significant fdi and technology transfers, and substantial remittances, among other channels. these bonds have yielded dividends on both sides of the border, including business and job creation, wider and more advantageous consumer choices, and higher living standards. 1 california, home of a long border and migration history with mexico, is one of the country ’ s most important trade and cultural partners. merchandise trade has expanded continuously through recent years. mexico and california, the world ’ s sixth largest economy, both gain greatly from these mutually beneficial exchanges. one of the most profound and longstanding links between mexico and the united states comes through tightly integrated industrial operations. this is more than clear in the high correlation between u. s. industrial and mexican manufacturing data over time. recently, structural reforms undertaken by mexico have opened up even more opportunities for the two countries. the overall reform agenda is extremely ambitious, encompassing broader and greater access to telecom services via more competition, an unprecedented opening of the energy sector to private investment, and changes to rules governing the labor market. however, its ultimate effectiveness obviously depends on the quality and depth of implementation over the coming years. 2 in any case, some of the reforms are indeed in their first phase of implementation, and they have likely only begun to produce results. furthermore, the advantages they bring could very well be enhanced down