Teaching Comparative Government and Politics

Monday, June 02, 2014

Counter-cyclical economy in Mexico?

Bad news for the PRI with mid-term elections just over a year away.

Mexico's economic growth falling short of government projections

Bad economic news continues to… undermine government efforts to portray the country’s financial situation as robust as it heads toward a major expansion of the oil-exploration industry.

Videgaray

Finance Minister Luis Videgaray acknowledged that growth was slower than the government had predicted but rejected the characterization of a recession. He cited the government’s statistics agency as saying the economy was merely stagnant.

“So the problem is that Mexico is growing at a lower rate than it should be, and continues to grow at the rates it has been growing, on average, for the last three decades,” Videgaray told journalists.

“Mexico is growing,” he said, but “it is definitely not the growth that Mexico needs.… Our rhythm of growth must accelerate.”…

Because Mexico’s economy is so intertwined with that of the United States, it is still recovering from its northern neighbor’s financial downturn. In addition, the Peña Nieto government has been widely criticized for failing to spend money in its first months, contributing to sluggishness.

Videgaray and other government officials insist that a battery of major reforms, including the opening of the oil and gas industry to foreign investment, is essential to improving the picture…

“The good news for Mexico is that fundamental changes are being made … changes, reforms that will permit us to speed up our growth in the years and decades to come,” Videgaray said.