NEW YORK — Beleaguered Mexico may need special emergency aid from the U.S. government to meet its foreign debt obligations this year, even if the price of oil falls no further than the current $20 a barrel, some economists and bankers believe.
They warn that the Reagan Administration might have to repeat the steps it took in the summer of 1982, when Mexico shocked the world by announcing it might default on its $80 billion in foreign loans. "The $20-a-barrel price puts them right on the threshold," one banking source said. "Their economy's in a condition where even at that level I think they may need help."
The dire predictions were sounded Wednesday as oil prices declined again slightly, and their recent weakness again took a toll on stock prices. The Dow Jones index fell 12.16 points to 1,502.29 as oil and banking stocks weakened, while prices for Canadian stocks on the Toronto Stock Exchange tumbled in their largest single-day fall since since Sept. 25, 1981.
The Canadian exchange's index of 300 stocks plummeted 55.42 points to 2,758, on trading of 26 million shares that made the day the exchange's fifth busiest.
After an early morning rally, the price of petroleum for future delivery slid again at the New York Mercantile Exchange. Contracts for crude to be delivered in March fell 42 cents to $20.39 a barrel, and many traders predicted that further decline is yet to come.
Economists noted that the oil price free-fall has come at a time when Mexico is suffering from a variety of economic ills, including those resulting from last fall's devastating earthquake.
Even in the absence of the recent price decline, Mexico needed an additional $4 billion in fresh loans to service its foreign debt, which, at $96 billion, has made it the world's second-largest borrower. The largest is Brazil, which owes $102 billion.
The latest plans called for Mexico to receive $2.5 billion in fresh loans from commercial banks and an additional $1.5 billion from public sources. But each $1 drop in oil's per-barrel price reduces Mexican oil revenue by about $500 million, economists say.
Willing to Help
As a result, although oil price declines also bring down interest due on loans, a $20 benchmark would mean a net increase in Mexico's borrowing needs of $2 billion to $3 billion, said William R. Cline of the Institute for International Economics in Washington.
Most analysts believe that Washington will be willing to step in to help Mexico, and some speculate that some plans may have been made for that eventuality when President Reagan met this month with Mexican President Miguel de la Madrid.
The first step in any U.S. emergency effort "will be some behind-the-scenes pressuring of the commercial banks to step up their assistance," said Penelope Hartland-Thunberg of the Center for Strategic Studies at Georgetown University. "If there's reluctance, I think you'd see government aid coming in a number of forms."
The United States might, for example, step up its purchases of Mexican oil for the U.S. strategic stockpile. The government might extend credits with which Mexico can buy U.S. agricultural products; it could also make available direct short-term loans, perhaps from the Treasury Department.
Cline said loans might also be forthcoming from the Export-Import Bank, the federal agency that seeks to assist U.S. exports, and from two international agencies, the International Monetary Fund and the World Bank.
Mexico's attempt to hold the line on its oil price helped drive down the country's oil revenues last year as the price war erupted. By last December, the country's daily output had fallen to about 1.13 million barrels a day, from a target of 1.55 million.
For the year, total oil revenues totaled $14 billion, compared to the $15 billion that had earlier been projected.
Mexican oil reserves, meanwhile, are believed to have declined to dangerously low levels.
"Mexico hasn't inundated the world with oil, nor provoked the conflict of which it is a victim," Francisco Labastid Ochoa, the Mexican oil minister, said to reporters in Mexico City on Wednesday.
Meanwhile, the nation has shown increasing symptoms of economic weakness. Growth in the country's gross domestic product, a creditable 6% in the first half of 1985, had fallen to zero by the second half. Inflation raged at 65% last year, driving down workers' real income.
So far, few voices in Mexico have been raised to urge the country to default on its loans, or even limit debt payments to a percentage of exports, as countries such as Nigeria have done. President de la Madrid and others in his dominant party, the PRI, have said steadfastly that the country must fully honor its international obligations, analysts note. At the same time, analysts note that if oil prices fall too far, debt repayment on current terms may be too great a burden for a long-suffering Mexican public.
"The more oil prices go down the more political pressure there is to throw in the towel," Cline said. "At some point that pressure becomes irresistible."