There is significant uncertainty within Mexico regarding economic growth, and it is not a good time to invest in the country, according to the consensus of analysts consulted by the Bank of Mexico.
The main concerns are the review of the United States-Mexico-Canada Agreement (USMCA), compounded by security issues and the rule of law.
Since September of this year, the three countries involved in the USMCA have begun a consultation period with the various market participants, with the goal of analyzing the issues and bringing them to the review tables starting July 1 of next year.
In this regard, the tariff threats from US President Donald Trump have been a constant source of uncertainty regarding the points to be negotiated at the trilateral meeting.
“Current factors: foreign trade policy” was the most frequently mentioned risk, cited by 15 of the 42 analysts surveyed.
The central bank conducts a monthly survey among 42 economic analysis groups on various topics.
Insecurity ranked second among analysts’ concerns, with 14 mentions.
The third most frequently mentioned risk factor was “Other problems related to a lack of rule of law,” with 10 mentions.
This year, Mexico implemented judicial reform, which involved the renewal of the justices of the Supreme Court of Justice of the Nation (SCJN), judges, and magistrates, who for the first time were elected by popular vote.
In a separate survey conducted by IPADE, eight out of ten respondents considered the implementation of this reform in the country to be negative.
The majority of those surveyed (56%) agreed that it is not a good time to invest in the country, a condition that aligns with the country’s economic growth expectations.
The consensus among analysts forecasts that the country will experience economic growth of 0.4% this year, a drop of one-tenth of a percentage point since the October survey.
According to the think tank ¿Cómo vamos?, the ideal level of uncertainty should be around 10%.
In this same vein, 7 out of 10 participants say there will be no improvement in the next six months: half of those surveyed expect things to stay the same, and 20% expect them to worsen.
They also don’t believe the economy is better than it was a year ago (93%), and only 2% say it’s a good time to invest.
Source: cronista
