By Anthony Esposito and Stefanie Eschenbacher
MEXICO CITY, July 10 (Reuters) - Mexico's new finance minister, Arturo Herrera, vowed to extend the tight fiscal grip exerted by his predecessor, moving to restore calm after the stormy departure of his former boss from the cabinet of President Andres Manuel Lopez Obrador.
Mexico will not stray from a commitment to run a primary budget surplus of 1% set by former finance minister Carlos Urzua and will probably set a similar target for the 2020 budget, Herrera said late on Tuesday.
"The most important anchor point of fiscal policy for this year is a primary surplus of 1%," he said. "It's most likely that for next year we will have a similar number."
Budget parameters will be presented on Sept. 8, he added.
Urzua resigned on Tuesday with a letter that shocked Mexico, as well as investors around the world.
A self-declared moderate, Urzua blamed his exit on policy "extremism," unspecified conflicts of interest among high officials, uninformed policy-making and interference in ministry appointments.
Urzua's commitment to fiscal discipline was seen as a bright spot in Lopez Obrador's administration, which has rattled investor confidence with abrupt moves against business interests in major infrastructure projects.
By naming Urzua's protege, Herrera, to the top job within an hour of the former's resignation, Lopez Obrador stemmed a sell-off in Mexican assets that saw the peso fall as much as 2% and the stock market drop 1.4%.
Seeking to further soothe nerves after the resignation dramatics, Herrera said he did not think Mexico's first-quarter economic contraction would herald a recession, adding that he would keep on good terms with investors.
"I don't see a recession around the corner," Herrera said. "I see that there has been a slowdown on a global level but we are very, very far from thinking that we are close to a recession."
Despite his comments on fiscal discipline, Herrera made clear he was also on board with Lopez Obrador's expansive infrastructure plans, and vowed to stay in the post until asked to leave.
Familiar to investors and seen as a competent economic manager, Herrera must now revive growth while kickstarting flagging investment and fending off downgrades from ratings agencies worried about indebted state-oil company Pemex.
"(Herrera) is a well-known figure with good dialogue with market participants and is not perceived as a ... dogmatic individual," said Alberto Ramos, head of Latin American research at Goldman Sachs.