MEXICO CITY — The outlook for Mexico's economy is bleak, but plastics industry analysts vary in their stances on 1999.
The trade group As¢ciacion Nacional de Industrias del Pl stico (Anipac) presented a study in December predicting growth for the industry.
But Instituto Mexicano del Pl stico Industrial President Rafael Blanco warned that the outlook is dark. IMPI, an independent plastics research and training company, also is preparing a study of the plastics industry.
Mexico is struggling to deal with declining petroleum prices and cuts in government spending.
``We started to observe the economy decelerating in the last quarter of 1998, and this trend should continue through 1999,'' said independent economist Jonathan Heath.
On the last day of 1998, Mexico's Chamber of Deputies passed the federal government budget and what President Ernesto Zedillo called ``the most austere in contemporary Mexican history.'' The budget calls for a $5.9 billion deficit, or 1.25 percent of the gross national product.
The government has estimated a 1999 GNP growth of 3 percent, although the consensus among analysts is for 2.5 percent, Heath said in a Jan. 4 interview from his Mexico City office.
Global capital markets may be a key factor affecting growth rates.
``If there is a moderate recovery in capital markets, this may help maintain or exceed growth expectations,'' he said. But investors are leery of emerging markets, following the 1998 meltdown in the Russian economy.
When Mexico devalued the peso and the local economy collapsed in 1995, successful Mexican firms relied on exports to survive, Heath added. But in 1999, fears of a slowdown in the United States could greatly affect Mexico. More than 85 percent of Mexico's exports go to the United States.
Nevertheless, consultant Eduardo de la Tijera estimates continued growth in resin demand. He expects polyethylene consumption to grow 8-9 percent in 1999, and PET consumption to grow 20-25 percent.
Anipac's study showed imports of resins, especially polyethylene, have increased due to ``new market demands and lack of supply from local producers,'' said Anipac President Juan Manuel Alvarez.
Anipac's study estimates per-capita plastic consumption doubled from 1988 to 1997, and should grow another 68 percent by 2005.
Alvarez made three suggestions to increase production by Mexico's plastics industry:
Expand raw material production. The study estimates that 229 million pounds of resin could be produced domestically instead of imported, permitting local production to increase 20 percent.
Increase exports to the United States.
Expand production by going after the share of the market currently held by foreign-owned maquiladoras.
``Taking a strategy to substitute bottling and packaging only, we could reach a total production that is 45.4 percent over what is produced nationally in the industry,'' he said.