Background on the Mexican Economy and Key Players
Mexico’s economy has been experiencing a slowdown, as reported by the National Institute of Statistics and Geography (INEGI) on Friday. The Indicador Oportuno de la Actividad Económica (IOAE) revealed a monthly growth of 0.2% in June, continuing the trend from previous months.
Recent Economic Performance
- June growth: 0.2%
- May growth: 0.3%
- April growth: 0.5%
Sectoral Performance
The economic expansion in June was driven by both the secondary sector (industries) and the tertiary sector (services), which grew by 0.2% compared to the previous month.
Monex Analysis
“Today’s results reflect reduced pressures for the main economic activity groups (secondary and tertiary); however, attention remains on the performance of tertiary activities, as they show notable moderation compared to the previous year,” according to Monex.
Challenges Facing the Mexican Economy
The Mexican economy faces a challenging landscape, both domestically and internationally.
External Factors
- Donald Trump’s re-election as US President has created uncertainty in global trade due to his policies.
- Mexico has been targeted for issues related to migration and organized crime.
Domestic Factors
Internal challenges include uncertainty around the operation of newly elected judges due to recent reforms in the Judicial Power.
Government and Institutional Projections
- Secretaría de Hacienda y Crédito Público (SHCP): Projects 1.5% to 2.3% growth for the year.
- Instituto Mexicano de la Empresa (IMEF): Projects 0.1% growth, in line with private institution analysts’ consensus.
- Organización para la Cooperación y el Desarrollo Económicos (OCDE): Projects 0.4% growth for Mexico’s GDP.
Key Questions and Answers
- Q: What is the current state of Mexico’s economy?
A: The Mexican economy is experiencing a slowdown, with the IOAE reporting 0.2% monthly growth in June. - Q: Which sectors contributed to the economic growth in June?
A: Both the secondary (industries) and tertiary (services) sectors contributed to the growth, expanding by 0.2% compared to the previous month. - Q: What challenges is Mexico’s economy facing?
A: The economy faces uncertainty due to external factors like US trade policies under Donald Trump and domestic issues such as migration and organized crime. Internally, there’s uncertainty around the operation of newly elected judges due to recent reforms in the Judicial Power. - Q: How do different institutions project Mexico’s economic growth?
A: The SHCP projects 1.5% to 2.3% growth, while the IMEF expects 0.1% growth. The OCDE forecasts a 0.4% increase in Mexico’s GDP.
