remarks by mr. javier guzman calafell, deputy governor at the banco de mexico, at the panel of central bank governors on “ new challenges for central banks in latin america ”. seminar on financial volatility and foreign exchange intervention organized by the central reserve bank of peru and the interamerican development bank. cusco, peru, july 25, 2017. 1 the central banks from emerging market economies ( emes ) have faced a challenging external environment in recent years. the monetary policies implemented by the advanced economies after the global financial crisis, combined with episodes of turbulence in highly integrated international financial markets deriving from a combination of factors, have resulted in substantial volatility of capital flows. in addition, emes have confronted a world economic environment characterized by lower rates of global potential growth, a decline in commodity prices, a growing anti - globalization sentiment and events of a geopolitical nature. the combination of these factors has led to a situation of acute uncertainty. if this were not enough, the global financial crisis has eroded confidence on our understanding of the economics science and of the proper way to implement monetary policy under current circumstances. the mexican experience of the last couple of years provides an illustrative example of the nature and magnitude of the challenges that our central banks have faced. since mid - 2014, the country has been hit by a combination of external shocks. to a significant extent, the current evolution of the economy the opinions and views expressed in this document are the sole responsibility of the author and do not necessarily represent the institutional position of the banco de mexico or of its board of governors as a whole. has been determined by the impact of these shocks and the economic policy that has been implemented in response to them. let me refer briefly to the most important : 1. the price of the mexican crude oil basket fell from around 100 dollars per barrel in june 2014 to some 45 dollars per barrel at present. although the share of oil in exports and gdp is relatively modest, it accounts for a substantial share of public revenues. therefore, these developments have had significant implications for public finances. in fact, when the impact of the concurrent reduction in oil prices and output is taken into consideration, the result is a decline in annual public revenues from this source of approximately 5 percent of gdp since 2012. 2. after a prolonged period with near - zero interest rates, the us federal reserve began to increase the target for the federal funds rate in late 2015. while this shock affects emes in general,

manuel sanchez : forces and threats to mexico ’ s economic recovery remarks by mr manuel sanchez, deputy governor of the bank of mexico, at the united states – mexico chamber of commerce, new york, ny, 28 september 2012. * * * it is a great honor to be back at the northeast regional chapter of the united states – mexico chamber of commerce. thank you for inviting me to share some thoughts with you on the recent evolution and outlook of the mexican economy. since i was here over a year ago, the pace of economic recovery in mexico has strengthened, even surprising on the upside, slightly exceeding mainstream forecasts. however, some risks that i exposed then still remain today, notably those related to the world economy, while others associated with domestic concerns have surfaced. in this brief overview of mexican economic conditions, i will focus on both old and new issues, including those regarding inflation and monetary policy in mexico. as always, my remarks are entirely my own responsibility and do not necessarily reflect the views of the bank of mexico or its governing board. current economic rebound since the middle of 2009, mexico has been experiencing a process of continuous economic recovery. three characteristics of the upswing are worth mentioning. first, the rebound has proceeded at rates that have been roughly twice as high as those observed during the first decade of the century, before the global crisis. 1 obviously, high growth is partly explained by adjustment from the deep recession that the country suffered three years ago in the aftermath of the global financial crisis. however, even after taking the correction into account, recent expansion is noteworthy. specifically, on average during the first half of this year, gdp increased 4. 3 percent in annual terms, which has contributed to bringing the economy back to the level of its long - term trend, as reflected by conventional estimations that the output gap has closed. this progress contrasts with economic underperformance relative to historical standards in many developed nations and, in particular, the united states, mexico ’ s main trading and investment partner. second, the current upturn has been balanced, in the sense that it has included all key components of aggregate demand, notably, domestic fixed investment and consumption. capital formation has shown substantial rates of growth, surpassing those of consumption, as typically occurs over business cycles. nevertheless, and despite recent signs of deceleration, during the last two years consumer spending has been increasing at a fairly stable annual rate, close to 4 percent. in a structural sense, the reactivation of economic activity