‘Even Argentina will have better numbers than ours’: The worrying outlook for the Mexican economy

Jorge Castaneda (Photo: Quartoscuro)

Last August, the Mexican economy showed weakness that many analysts and experts indicated, noting that it is a precedent for the results that will be observed so far in the second half of 2021. Expressed in this regard is Former Foreign Minister Jorge Castañeda.

Among other things, the former official refers to a series of decisions by the current government, which led to the current scenario. For example, he mentioned the law eliminating the “outsourcing” number, which might respond to reduced services. He points out that another reason is the same as with the economy of the neighboring United States, which by falling into the “sentinel”, as he calls it, dragged the Mexican economy, albeit slightly.

He notes that before this scenario, “it looks like it’s hard to achieve the 6% growth for 2021 that Lopez Obrador promised. Instead, we’d be at 5.5%, and as the statistic rebound effect wears off, the rate will drop.” Next year, an expansion is expected between 2 and 2.5%. “These pathetic results can be justified by the pandemic, the recession in the United States, or because everyone has done poorly. This is not true,” he warns.

Then he explains that the effect that occurred in 2020, when the economy of many countries contracted, and the opposite occurred in 2021, when countries such as Chile, Colombia or Brazil showed strong growth, were not the same dynamics shown by Mexico, a country that will accumulate in total, for both years, A negative economic growth figure between -2% and -3%.

“Even Argentina will have better numbers than ours, although not hardly. Our performance was the worst among the large economies in the region and was only comparable to the performance of some European countries that were hit hard by the virus and recession,” Castaneda said.

AMLO and Jorge Castañeda (Photo: Cuartoscuro)
AMLO and Jorge Castañeda (Photo: Cuartoscuro)

Of course, it recognizes that these countries are currently facing opposite situations with their public finances, which will cause them to close the year with a deficit of more than 10% of their GDP.

“Mexico does not have these ills,” Castañeda notes, “the numbers are not zero deficits, but they also do not reach the overdraft in Latin America. If, for one reason or another, these deficits become significant obstacles to growth in 2022, and in Mexico Our financial balance allowed us to grow more, it means that each country chose a path with advantages and disadvantages. Mexico has done worse, but it will do better. The others have done better, but it will be worse.”

But for Jorge Castañeda, the real problem is that things are not like this, because he expects, as is very hoped, that the 2% expansion for Mexico next 2022, will be the same as those countries, and even sees that it is likely that these expand economies. More Mexican next year. “Wherever you look, Mexico has fared more modestly both than our major trading partners (US and Canada) and countries with per capita GDP (Latin America),” he lamented.

If we add to this that almost all of these countries have provided important and direct support to every citizen, and Mexico has not, we see that in the face of the economic downturn of the virus, there are social stratification. And against the virus in this way, too. Lopez Obrador would be the most popular after the fascist prime minister of India. It is also the worst,” concluded the former Mexican foreign minister.

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