Introduction
Economic expectations are currently better than anticipated, enthusiastic analysts declare, joining the celebration of President Claudia Sheinbaum’s first year in office.
But how does this compare to previous times?
If the benchmark is against a period of an artificial legislative majority seizing control of the judiciary while Donald Trump issued his first tariff threats, then yes, we are in a better position.
However, when compared to the economic expectations for Mexico 18 months ago, with a projected triumph of the same regime and Joe Biden’s re-election, the reality is that things have gone worse.
Objective Factors Influencing the Economy
Beyond unpredictable elements like election outcomes, there are objective factors shaping the economy’s behavior:
- Mexico needs to undertake fiscal correction after an irresponsible increase in debt during the final year of López Obrador’s previous administration.
- The US and Mexico faced a more pronounced struggle against persistently high inflation, pushing monetary policies into restrictive scenarios.
Banco de México’s Analysts’ Survey
Using the Banco de México’s analysts’ survey as a basis to gauge current economic expectations, the latest edition published yesterday anticipates a 0.50% GDP expansion.
- Inflation is expected to end the year at 3.85%.
- The projected exchange rate is 19.01 pesos per dollar.
Compared to estimates from May last year, the economic outlook has indeed improved.
- Five months ago, analysts projected a 0.18% GDP growth, 3.90% inflation, and a dollar closing the year at 20.50 pesos.
How significant is this improvement?
Looking back a year, analysts expected a 1.20% GDP growth, 3.80% inflation, and a 19.81 pesos-per-dollar exchange rate with the artificial legislative majority in place but without Trump as US President.
In January 2024, estimates for this year (2025) began to surface, projecting a 1.94% GDP growth, 3.71% general inflation, and a 19.10 pesos-per-dollar exchange rate by year’s end.
Are We Truly Better Off?
No, we are far from the historical growth rates of Mexico’s economy before this regime and much further from the growth rates needed to genuinely foster social well-being.
Yes, we are better off compared to a time of an artificial legislative majority seizing control of the judiciary while Donald Trump issued his first tariff threats.
