Aguascalientes, Ags., October 25, 2024. The Dr. Alejandro Rodríguez Magañaan expert in finance and economics of the Universidad Panamericanagave the conference: "Mexico: Economic Perspectives in the face of the new government."He spoke about the challenges and opportunities Mexico faces in this new political context. During his lecture, Dr. Rodriguez offered a detailed analysis of the challenges and opportunities facing the country in this new political context, highlighting the main elements that shape the current economic outlook.
Economic outlook of the outgoing six-year term
One of the central points addressed was the analysis of the economic growth of the outgoing six-year term, marked by one of the lowest growth averages in Mexico's recent history. This period was impacted by the COVID-19 pandemic, which slowed economic activity and affected numerous sectors. According to Dr. Rodriguez, the Gross Domestic Product (GDP) grew by about 1% during this six-year period, representing the lowest rate of expansion since the government of Miguel de la Madrid in 1988.
Despite this limited growth, there was a decline in poverty in real terms. poverty declined in real terms, driven in partin real terms, driven in part by the significant increase in the minimum wage since 2018. This increase generated higher household incomes, which in turn promoted job creation. However, although the current unemployment rate is low, challenges remain to achieve full and quality employment.
Inflation and monetary policy
Another key issue is inflationThe control of inflation has been a constant challenge. The Bank of Mexico's inflation target, set at 3%, has not been met since the arrival of the pandemic, due to a series of external and domestic factors that have destabilized prices.
"Among the sub-indices of the general inflation rate, we observed very diverse behaviors in areas such as food, fruits and vegetables, agricultural products, energy and education, each with its own trends. This directly impacts consumers' pockets, since, in the end, it forms part of the national consumer price index"he said.
In addition, the Bank of Mexico has adjusted its benchmark interest rate in an attempt to control the money supply. "When there is excess money circulating, prices tend to rise, and central banks adjust rates to moderate this tendency "The expert explained.
Challenges and opportunities in economic integration
Mexico has shown a growing economic integration with the United States, especially within the framework of supply chains, where it has managed to surpass China in certain strategic aspects. This context presents a great opportunity for Mexico through nearshoring. nearshoringa growing trend that is attracting foreign attracting foreign investment and strengthening local industries.
The specialist emphasized that, despite the progress made, Mexico faces serious challenges that affect the national economy, such as rising inflation, problems in supply chains, insecurity, deficient public investment and the concentration of power. He also highlighted the importance of autonomous bodies, as well as reforms in the judiciary, public health and education. "Education is a fundamental pillar for the country's progress and a key bet to achieve sustainable development," he said.he pointed out.
Importance of investment and the international context
He also teaches graduate courses at the Aguascalientes and Aguascalientes campuses. Aguascalientes y Guadalajara, emphasized the need to attract investment to generate quality jobs, in a context of imminent elections in the United States and possible constitutional reforms in Mexico. He recalled that in 2026 the T-MEC will be reviewed, a key opportunity to negotiate and adjust this trade agreement according to Mexico's interests. "We must consider our options and decide whether or not we want to accept Chinese investments and other international agreements," he said.
Among the possible threats to the country's economic development, the expert mentioned geopolitical tensions, problems in supply chains, global inflation, fiscal deficit and risks associated with the concentration of power in the current government. In addition, electoral uncertainty in the United States and economic competition with China add volatility factors that could affect Mexico.
Budgetary challenges and the need for a green agenda
According to data from the Ministry of Finance and Public Credit, Mexico allocates a large proportion of its budget to pensions, financial costs and participations, while spending on education and health continues to be insufficient. "During the six-year term that ended, initiatives towards clean energy were abandoned, which is an aspect that we must seriously reconsider", concluded Dr. Rodriguez.Dr. Rodriguez concluded, calling for reflection on the importance of a green agenda for the country's future.
About Dr. Alejandro Rodríguez Magaña
Alejandro Rodríguez Magaña holds a PhD in Administrative Sciences from the Instituto Politécnico Nacional and a Master's degree in Financial Economics from the Universidad de Santiago de Chile. He currently serves as general administrator of the Guadalajara and Aguascalientes campuses of Universidad Panamericana, in addition to being an independent consultant and postgraduate professor at both campuses.
