Mexico's president, President Felipe Calderon, announced on Monday that he would incorporate a stimulus package, to help increase the economic power the country has – and to help stave off a recession. The country will see a temporary cut in the amount of income tax paid, as well as a reduction in electrical power rates. The goal is to help provide a cushion to the country, to help stave off a possible recession.
Mexico is a large trading partner with the United States. Some 80% of exports go to the US. Many areas including the tourism sector depend on the US economy.
Reuter's reported that President Felipe Calderon said, "A discount has been authorized, a reduction of 3% on provisional business income tax payments and the flat rate business tax."
The government is concerned with the housing slump and credit crunch hurting the United States right now. They feel that the downturn in US markets will cause a recession in 2008 within the United States, which in turn would drastically hurt the Mexican economy.
Growth is expected to decline as well to about 2.8% for 2008.
