Latin America Advisor 2022-02-07 – Inter-American Dialogue

LATIN AMERICA ADVISOR

A daily publication Of the dialogue

February 7, 2022

What Should AMLO Do to Get Mexico’s Economy Growing?

Factors including uncertainty over President Andrés Manuel López Obrador’s energy agenda have weighed on Mexico’s economic growth. // File Photo: Mexican Government.

Q

Mexico’s economy grew 5 percent last year, but it fell into a technical recession in the final two quarters of the year as the country’s gross domestic product contracted in both the third and fourth quarters, according to data that national statistics institute INEGI published on Jan. 31. Latin America’s second-largest economy has been in a difficult position in the past few months, with rising interest rates, inflation above 7 percent and uncertainty over Andrés President Manuel López Obrador’s energy agenda. What factors will be the most important in pushing Mexico away from a recession in the year ahead? What steps can policymakers take to move the economy toward better results? Which sectors show the most promise for growth, and which will likely lag behind?

A

Lucinda Vargas, research fellow at the Center for Border Economic Development at New Mexico State University: “Mexico’s economic growth this year will closely mirror the growth path of the U.S. economy. The two nations are highly integrated via intra-industry trade through the maquiladora and manufacturing export sectors, which are currently exhibiting double-digit growth. Positive prospects in this binational manufacturing base are in part fueled by a nearshoring trend as export companies servicing the U.S. market look to Mexico and away from Asia as a way to avoid or minimize supply-chain bottlenecks. While monetary policy should continue its appropriate tightening course to address inflationary pressures, other policies should focus on deeper problems of institutional weakness that are keeping the country from achieving long-term sustained growth…”

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The Inter-American Dialogue publishes the Latin America Advisor every business day for a distinguished membership of informed corporate leaders, scholars, and government officials invested in Latin America’s development and future. The Advisor‘s highly regarded Q&A section covers questions submitted by subscribers themselves. Commentators regularly include heads of state, business leaders, diplomats, economists, analysts, and thought leaders from around the world. Many of the world’s largest and fastest-growing companies subscribe to the Advisor. To subscribe, click here. For terms and conditions, click here. For more information, contact Gene Kuleta, editor of the Advisor, at gkuleta@thedialogue.org.

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Gene Kuleta
Editor
P. 202.463.2920
E. gkuleta@thedialogue.org

Carl David
Goette-Luciak
Reporter

Nili Blanck
Reporter

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Diego Arria
Director,
Columbus Group

Merike Blofield
Professor of Political Science,
University of Hamburg

Devry Boughner Vorwerk
CEO,
DevryBV Sustainable Strategies

Joyce Chang
Global Head of Research,
J.P. Morgan

Marlene Fernández
Corporate Vice President for Gov’t Relations,
Arcos Dorados (McDonald’s)

Peter Hakim
President Emeritus,
Inter-American Dialogue

Donna Hrinak
Director,
Adtalem Global Education

Jon E. Huenemann
Council Member,
GLG Inc.

James R. Jones
Chairman,
Monarch Global Strategies

Craig Kelly
Senior Director,
Int’l Gov’t Relations,
Exxon Mobil

Barbara Kotschwar
Professor of Political Economy,
Georgetown University

John Maisto
Director,
US Education Finance Group

Nicolas Mariscal
Chairman,
Grupo Marhnos

Thomas F. McLarty III
Chairman,
McLarty Associates

Beatrice Rangel
Director,
AMLA Consulting

Ernesto Revilla
Head of Latin American Economics, Citi

Gustavo Roosen
President,
IESA

Andrés Rozental
President, Rozental &
Asociados

Shelly Shetty
Managing Director,
Sovereigns, Fitch

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