Introduction
In my previous collaboration, published on El Economista, I warned about the risk of the Banco de México lowering interest rates when inflation signs were already showing a rebound. Earlier, I pointed out that the central bank’s actions were not only late but detached from the economic reality. With new data and decisions, this concern is reinforced and aggravated.
Expert Opinion and Economic Forecasts
“The only growth that seems assured is inflation and the lack of confidence,” says Macraf, echoing concerns about Mexico’s economic outlook.
The Citi Encuesta de Expectativas, published on July 22, paints an even more pessimistic picture than Banxico:
- The median economic growth rate for 2025 remains at 0.2%
- The expected subyacente inflation rises to 4.03%
- The exchange rate is projected at 19.85 pesos per dollar, with a sustained depreciation.
Despite this, the consensus points to another 25 basis point cut in August, with a target rate of 7.5% by year’s end. This decision still fails to address the real economic situation.
The Fondo Monetario Internacional (FMI) also reduced its growth estimate for Mexico in 2025 to 0.2% in its World Economic Outlook for July. Mexico’s economy is slowing down the most in Latin America, reflecting weak domestic consumption, misguided fiscal pressure, and chronic lack of productive public investment.
Government Intervention and Pemex
In parallel, the Mexican government has decided to inject billions of dollars into Pemex once again. This time, it’s 12 billion USD to rescue a company that has shown no signs of efficiency or direction for years. Although Pemex reported a positive result in the last quarter, this was due to favorable currency movements rather than operational improvements. The negative balance sheet reflects an unsustainable structural situation.
Instead of allocating these resources to health, education, security, or infrastructure, they are directed towards a petroleum company on the brink of collapse for decades. The most serious issue is that this rescue perpetuates a misguided narrative: Pemex is worth saving due to its symbolic value, not because of a promising future. This has a high economic cost.
Export and Import Data: A Deeper Look
There’s excitement over the latest positive data on Mexican exports, surpassing previous months. However, this comes with a significant drop in imports, contradicting any optimistic narrative. US companies have accelerated purchases to build inventories before a new tariff scheme promoted by their government takes effect. This artificially inflates Mexican exports.
A decrease in imports is not good news. If we understand that quality of life involves access to more, better, and higher-quality goods and services, then a contraction in imports reflects a weakened domestic market. Families lack sufficient resources to consume national or imported goods, limiting their well-being to what the local market offers. There’s no stability when export growth is due to temporary factors while consumption and investment contract.
Key Questions and Answers
- Q: What is the current economic outlook for Mexico? A: The economic growth is projected to be weak, with persistent inflation, stagnant employment, and public spending diverted to low-impact projects.
- Q: How does the recent data on Mexican exports and imports reflect the economic situation? A: While recent export data appears positive, it’s accompanied by a significant drop in imports. This indicates a weakened domestic market, as families struggle to afford both local and imported goods.
- Q: What are the implications of the government’s decision to inject funds into Pemex? A: This move perpetuates the misguided narrative that Pemex is worth saving due to its symbolic value rather than a promising future. It also diverts resources from essential sectors like health, education, and infrastructure.
