Economy
From The Report: Mexico 2019
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Analysts are expecting 2019 to be the fourth successive year of economic deceleration, with the IMF forecasting growth will fall to 1.6% in 2019 before accelerating modestly to 2-3% over the medium term. Some risks to growth include the continued slowdown of the US economy, to which Mexico’s fortunes are closely tied, and the rising uncertainty generated by global trade tensions. However, given the government’s commitment to maintain a conservative fiscal and monetary policy, and to keep private sector debt levels low, in addition to the substantial financial support provided by the IMF and central bank reserves, a full-blown financial or economic crisis is unlikely. This chapter contains interviews with Graciela Márquez Colín, Minister of Economy; and Eduardo Sojo Garza-Aldape, Director-General, National Laboratory of Public Policy at the Centre for Research and Teaching in Economics.

Articles from this Chapter

Overview

Structural support: Despite economic uncertainty, reforms, infrastructure projects and trade deals are expected to stimulate medium-term growth
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Following a series of economic crises in the 1980s, Mexico progressively abandoned its relatively closed, inward-looking economic development strategy. Periodic waves of liberalising structural reforms have underpinned its transformation from an economy once heavily dependent on crude oil exports, to one of the world’s most open, trade-orientated emerging economies. One of the most important steps in this process was the ratification of the North American Free Trade Agreement (NAFTA) in 1994. Not…

Interview

Broad strategy: Graciela Márquez Colín, Minister of Economy, on trade relations, infrastructure investment and labour productivity
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Interview:Graciela Márquez Colín How will the Mexican economy fare in times of growing global protectionism? GRACIELA MÁRQUEZ: The Mexican economy has firm foundations that guarantee its stability despite global challenges. The government is committed to maintaining fiscal discipline, which ensures a sustainable trajectory of public finances. In addition, Mexico has solid economic institutions, particularly Banco de México, the autonomy of which is essential to guaranteeing price stability…

Interview

Activity boost: Eduardo Sojo Garza-Aldape, Director-General, National Laboratory of Public Policy at the Centre for Research and Teaching in Economics, on plans for socio-economic growth
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Interview:Eduardo Sojo Garza-Aldape What are the aims of the National Development Plan (Plan Nacional de Desarrollo, PND) 2019-24? EDUARDO SOJO: The most important factors driving the country’s economic growth as outlined in the PND are healthy public finances, security, anti-corruption measures, the US-Mexico-Canada Agreement (USMCA), financial inclusion and energy. The government’s main focus is on strengthening security by developing the national guard. However, it does not outline…

Analysis

Austerity drive: While a national plan prioritises social spending, critics argue it falls short on structural reform and institutional development
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In accordance with the constitution, every six years the newly elected president of Mexico is required to prepare a National Development Plan (Plan Nacional de Desarrollo, PND) covering the length of his or her mandate. The plan must be submitted to Congress for approval in the early months of the presidency, allowing the incoming administration to set out its vision for the country, as well as priorities for investment and reform over the coming period. In his third attempt at the presidency, Andrés…

Overview

Shifting trade winds: Regional integration among emerging economies and a raft of new multilateral agreements bolster international trade
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Global trade faces protectionist headwinds that are dampening the outlook for growth in the coming years. According to the World Trade Organisation (WTO), trade volumes expanded by 3% in 2018 and are expected to decline slightly to 2.6% in 2019 before rebounding to 3% in 2020. This may be the first time since the 2007-08 global financial crisis that growth will fall below a 3% average, as significant uncertainty driven by an escalating US-China tariff war, acrimonious Brexit negotiations, and wariness surrounding US involvement in several multilateral trade agreements affect business confidence and investment decisions. Nevertheless, although…

Overview

Shifting trade winds: Regional integration among emerging economies and a raft of new multilateral agreements bolster international trade
OBG
plus

Global trade faces protectionist headwinds that are dampening the outlook for growth in the coming years. According to the World Trade Organisation (WTO), trade volumes expanded by 3% in 2018 and are expected to decline slightly to 2.6% in 2019 before rebounding to 3% in 2020. This may be the first time since the 2007-08 global financial crisis that growth will fall below a 3% average, as significant uncertainty driven by an escalating US-China tariff war, acrimonious Brexit negotiations, and wariness surrounding US involvement in several multilateral trade agreements affect business confidence and investment decisions. Nevertheless, although…