According to him International Monetary Fund (IMF)the World economy will grow 3.2% for this 2024 and 3.3% for the following year. While the economies advanced (where it is not Mexico), will grow only 1.7%, in contrast to emerging and developing economies, where China and India are located, which will grow on average 4.3%.
It must be remembered that the Gross Domestic Product (GDP)it’s a indicator of the overall behavior of the economywhich represents our productive capacityif there is economic growth, then, the companies They are producing more goods and services, which means generating jobs and welfare for the country.
Otherwise, if we produce fewer goods and services than the previous period, then the companies They start to dismiss employees, reduced the news investments and we could enter a economic slowdown or in a economic crisis.
In the case of Mexicohe IMF lowered its growth expectations in its quarterly adjustment from 2.4% to 2.2%, while the expected growth for the first year of the President-elect will be 1.6% (2025).
The estimate of this international organization contrasts with the optimism of the Ministry of Finance and Public Credit (SHCP), which places it in the range of 2.5%-3.5%.
But how would it impact us if the Mexican economy does not grow at the rate estimated by the Treasury?
Simply put, ordinary income, that is, the taxes that people and companies pay, would not be at the level expected by the Treasury Department and therefore the budget would not be balanced.
And that should be alarming, because if the government does not obtain the income it expects (via taxes, quotas, rights, products and profits), then the other alternatives are to take on more debt, sell government assets or cut programs and leave works unfinished.
As of today, the Federal Government’s public debt (domestic and external) reaches 16.5 trillion pesos, which represents 50% of GDP and is beginning to become a growing risk for public finances.
On the other hand, the slowdown of the Mexican economy is explained by the downward adjustment in consumption in the United States, which is our main trading partner and whose growth will be 2.6% and is expected to cool down to 1.9% by 2025.
Regarding internal reasons, the main one is the fight against inflation, via high interest rates (11%), which encourage savings, but limit financing and new investments by companies, individuals and the government itself.
The above, at the national level, has been reflected in 3 months with losses of formal jobs (March, May and June, compared to the previous month) and in the case of the manufacturing industry with 9 consecutive months of decline, while domestic demand, measured through private consumption, also began to slow down in the 2nd quarter of 2024.
However, the optimism of the SHCP is justified by the trade flow of 1.2 trillion dollars that Mexico has with the world, the 190,000 million dollars that have come from Foreign Direct Investment (FDI) throughout the six-year term and the announcements of investments for more than 45,000 million dollars for 2024.
It is worth noting that in the IMF report, Argentina is the only country in the world whose economy will contract by 3.5% this year.
So, I ask you, dear reader: in your day-to-day life, how do you perceive the direction of the Mexican economy?
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