He performance of the economy in the six-year term current was determined by factors such as investment and the recession resulting from the covid-19 pandemic in 2020.
According to a report issued by the Center for Economic Studies of the Private Sector (Ceesp), The average growth rate throughout the six-year term will be 1.1 percentthe lowest in the last five.
“At the end of the six-year term, there were practically no confirmed economic figures on the benefits of the economic policy measures that, according to the official discourse, were implemented with the objective of promoting growth by strengthening the internal market and reducing poverty, so that the country would improve its attractiveness for investment,” commented the Center for Studies.
Alejandra Macías, executive director of the Center for Economic and Budgetary Research (CIEP), said in an interview with MILLENNIUM that growth depends on many things and it is very difficult to ensure or achieve what is mentioned from one year to six years.
“During the current administration, things happened that were not planned, right? Like the pandemic, like the wars in Ukraine, in Gaza, and all of that puts us in a global stress that we cannot avoid,” he said.
“Also everything that is happening in the United States and sovereignty. Above all the part about not cutting rates, since they keep us restricted from lowering ours, and all that, that is, all the macroeconomic variables are coming together and are the ones that are defining growth,” added Macías.
He stressed that one of the criticisms that the CIEP has been making is that the government is generally very optimistic about these macroeconomic variables, mainly growth.
“But if the government is not optimistic, then who is? So I think it is a good position, but it has to be measured, right?” he said.
He pointed out that these variables must be taken into account because they fluctuate a lot over time, because factors such as the price of oil also play a role, “so if there is a year in which it increases a lot, there is another year in which it also falls a lot, which has an impact on the economy and on public finances.”
He also referred to the government’s energy policy, concluding: “I think that a different type of policy, other than self-sufficiency and the nationalization of that industry, will necessarily generate growth for us,” he said.
“This does not currently generate growth for us, given that we now have the most indebted oil company in the world. And I believe there is enormous potential to make structural and profound changes, which will even allow us to be at the forefront of the energy sector,” he added.
For his part, Jesús López, deputy director of Analysis of Grupo Financiero Base, in an interview with MILLENNIUMstressed that in economic terms, growth targets are not being met.
“Considering the growth forecasts we have for this year, the economy will obviously end up growing by around 1.6 percent in 2024, and even if there was faster growth this year, it is very difficult for us to have a different scenario,” he said.
He added that one of the key issues that occurred during the current President’s six-year term, especially after the pandemic and the United States’ efforts to protect its global position and investment issues, is nearshoring. “Is this phenomenon occurring or not?”
“What we saw is that yes, there are important flows and announcements of investment towards Mexico, but I believe that it is an opportunity that was completely wasted, at least during the six-year term,” he commented.
“In fact, if we look at the foreign direct investment data for the first 21 quarters of each six-year term, what we will notice is that, well, the Foreign Direct Investment (FDI) flows in billions of dollars, adjusted for inflation, are lower during López Obrador’s six-year term than during the six-year term of previous administrations,” he added.
He pointed out that with the President Andres Manuel Lopez Obradornew investments were recorded, amounting to around 65 billion dollars, “which would be a figure even below what was seen in the six-year term of Carlos Salinas de Gortari of 71 billion dollars,” both amounts adjusted for inflation.
When reviewing the information in current dollars, which goes to the first quarter of 2024, FDI from new investments corresponds to only 3 percent of total investment.
“Last year, in the same period, it was 5 percent, and in 2022 it was 45 percent. What does this mean? We do have FDI flows in the last two years, but these flows are mainly explained by reinvestment of profits and by accounts between companies, not so much by new investments,” he stressed.
He added that this data is another key point of López Obrador’s six-year term, that although there is a great international opportunity for investment and economic growth in the country, it is being wasted and “obviously we still do not see these flows of new investment triggering yet.”
Enrique Covarrubias, chief economist and director of analysis at financial group Actinver, commented in an interview with MILLENNIUMthat an economic shock as strong as the one experienced around the pandemic is a type of structural change that lasts many quarters, making it difficult or almost impossible for a long-term economic plan to be 100 percent fulfilled in that small window of time.
“If you look at the economic growth rates in Mexico over the past few years, in 2021 it grew by 5 percent, in 2022 it was 3.7 percent, last year it was 3.1 percent, and we think it will be 2 percent in 2024, these are growth rates that indicate a significant economic recovery after the pandemic,” he said.
“Clearly, if you add the pandemic, it is a growth, which means that it is difficult to recover with such a significant shutdown of the economy. In the most normal post-pandemic years, the growth is with attractive figures,” he added.
