The Mexican economy is no longer exciting

I wrote last week in this space about the potential performance of the economy as of April, the month from which analysts expect a rebound in growth, which is mainly explained by the fact that a large portion of Mexican economic activity has resumed, but that does not mean that it is taking place. Now much more production, consumption or investment than before. So, it is essentially the inertia effect of the economy which, after a strong restraint, is starting to advance again, but at an almost as slow pace as it has been since the beginning of 2019.

Yesterday Inegi unveiled the Global Economic Activity Index (IGAE) behavior data for February, which showed a decrease of 0.3% compared to January, ie a slowdown in the pace of economic activity. The data is better than the very initial estimate Inegi released up front, but fell less than analysts really expected. Therefore the economy continues to show weak signs that it will rise strongly as promised every day by the current government.

In fact, the level reached by IGAE is compared to the level reported between December 2015 and January 2016. So we are still lagging behind, even compared to pre-pandemic levels. At the same time that we comment on this regarding the outlook for the Mexican economy, the US economy is showing with increased consistency the rate of recovery so that there are already those who estimate that by the second half of this year, it will be growing faster than its potential pace before the pandemic, than It also allows us to predict by the end of this year, the economy of our northern neighbor will not have regained the ground it lost as a result of the shock caused by the Covid-19 pandemic, but it will also have progressed a little.

See also  The head of the International Monetary Fund supports Biden's stimulus plan for the US economy

In order to regain the ground that the Mexican economy lost, not only in the past year, but in practice since the beginning of the current administration, it is necessary to send clear signals to investors that discretionary changes to the rules will not continue to promote them, the decisions that have been analyzed slightly will not continue to be adopted, and they will not continue Creating more uncertainty, which is the main factor explaining the poor performance in terms of investment in the past two and a half years.

Public spending on massive infrastructure work alone will not get Mexico out of the mess it plunged into today, let alone if this infrastructure work begins to show significant delays as the promised completion date approaches.

It is disturbing that with what has been accomplished, what has not been done and the uncertain signals that have been sent to investment, Mexico is far from being considered a star economy, with a promising future that would systematically allow its residents and improve their level of well-being. Perennial, it is now seen as one of the Latin American countries that inexplicably insisted on faltering and stagnant in terms of its development potential. Is this what President Lopez Obrador really wanted? I don’t think so, so he still has time to correct his course.

Embed a Tweet

Aileen Morales

"Beer nerd. Food fanatic. Alcohol scholar. Tv practitioner. Writer. Troublemaker. Falls down a lot."

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top