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CITY OF MEXICO (Enlargement) – The cancellation of the New Mexico International Airport (NAIM) would create a wave of short- and long-term economic repercussions.
According to specialists consulted by Expansión, the loss of investor confidence would be the main consequence.
"This would reduce investors' confidence in carrying out projects with the government, and it will be more difficult for the government to find partners," said Marco Oviedo, head of research for Latin America at Barclays.
"It's clear that private investment is an important driver of economic growth – most of the senses would be the real investors, those who invest in gross capital formation," said Jaime Reusche, Sovereign Analyst for Mexico at Moody & # 39; s.
Levels of private investment in Mexico by foreigners and nationals would fall and financial investors would also react.
Mistrust would generate a capital outflow from the country, a drop in the price of Mexican bonds in the market, a more expensive debt for the public sector, volatility, the depreciation of the peso and a decrease in the influx of tourists.
"The cancellation would be described as the event of fault for airport bonds, this would have an impact on all Mexican assets: it would remain on Mexican bonds; for the Mexico-Pemex relationship, Pemex bonds would be affected, as well as the exchange rate, "added Oviedo.
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It has already been observed in the price of bonds placed to finance part of the construction of NAIM, warned Gabriela Siller, director of economic analysis of Banco BASE.
The bonds issued rise to $ 6,000 million since its first issue in September 2016 until September 2017. The bond price at age 30 has risen from $ 99.39 to $ 88,066. dollars. While its interest rate went from 5.5% to 6.41%, Siller referred in an analysis over the same period.
The approximate cost of canceling the new airport would be 120,000 million pesos, according to estimates by the Mexican Institute for Competitiveness (IMCO).
"In addition to the irreversible costs, the government's credibility with respect to contracts is one of the most costly consequences." According to Oviedo, the cost of debt for Mexico would increase depending on the severity of market perception. by this event.
In addition, the cancellation would result in the loss of jobs, those generated by the construction of the project and those that would cease to generate in the future. However, this impact would be greater for the area in which it is built.
In addition, the saturation of the current airport would not be resolved, which would create a bottleneck of not being able to accommodate more passengers, which would affect the arrival of tourists and so on the entry of foreign currency, Oviedo said.
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