Claudia Sheinbaum’s Successful Economic Navigation
A year into her presidency, Claudia Sheinbaum’s government has successfully navigated the global economic storm. The public finances have improved, largely due to better revenue collection, innovative approaches to bolster Pemex’s finances, and fiscal discipline. Mexico remains the country with the best debt profile among middle-income economies.
Steady Exports and Foreign Investment
Exports have remained steady despite trade uncertainty, foreign investment is growing, and domestic investment remains normal. Initial fears that social programs couldn’t be funded, salary minimums and labor benefits would have massive economic costs, or the exchange rate would inevitably depreciate have been debunked. An economy stable and now capable of income distribution and poverty reduction has been built.
Challenges Ahead: Focusing on Internal Market and Strategic Sectors
While growth remains slow, it’s typical for the first year of any administration, especially amid global uncertainty and a stagnant global environment. However, Mexico is not facing recession, nor close to it. The positive news includes a better tariff situation compared to the rest of the world, ongoing negotiations for further improvement, and trade within the T-MEC framework. This outcome is a result of Sheinbaum’s strategy to guide Mexico-US relations in favor of national interests.
Strategic Sector Focus and Investment Attraction
Given the global scenario will likely involve less openness to international trade, Mexico must focus on its internal market, particularly in sectors affected by Asia’s unfair trade practices like textiles and footwear. Other strategic sectors include agroindustry, circular economy-related activities, substituting inputs, attracting and developing high-tech activities, and related services.
- Infrastructure Investment: Priorities include public infrastructure, railways, and energy, hydrocarbons, and port-related investments with private sector participation. The goal is to attract more domestic and foreign investment through development poles, tax incentives, investment support programs, and attraction strategies.
- Financial Sector Enhancement: The aim is to encourage intermediary financial institutions to offer more credit at lower rates and accelerate financial inclusion.
- Education and Skills Alignment: Programs are being developed to adapt education offerings to industry needs, including micro-credential schemes for skill compatibility with industrial requirements.
In a complex global economic period, Mexico remains well-positioned for development in the coming years. Now, with policies that enable income distribution, Mexico is poised for sustainable growth.
