FOCUS | MEXICO
Indeed, the past three decades have seen
Mexico underperform in terms of growth, inclusion and poverty reduction compared with similar countries, according to the World Bank. Between 1980 and 2022, the economy grew by just over 2% annually on average, slowing its progress towards closing the gap with high- income economies. In 2023, economic growth hit 3.2%, partly fuelled by a post-pandemic rebound, but slowed again in the first half of 2024 to just 1.8%. The country’s poverty rate has been falling
steadily, and a relatively stable macroeconomic framework has emerged, along with a strong manufacturing base. Nevertheless, the current slowdown is cause for concern. GDP grew only 0.9% year-on-year in Q4 2024, with lower investment, slowing consumption and a contracting energy sector partly to blame, although there was some growth in international trade. In its latest report, the Bank of Mexico cut its forecast for GDP growth in 2025 to just 0.6%.
Hard work ahead for Sheinbaum’s new regime Investment contributed 3% less to GDP growth in 2024 compared with 2023, the biggest
fall coming in non-residential construction investment, though there was also a marked decline in the purchase of imported machinery and equipment. The weakening of the Mexican peso against the US dollar was a key factor, but high interest rates and flat employment levels also played their part. The good news came in the form of growth in net exports during 2024, though that could be under threat as the US continues to ignite trade wars with even its closest neighbours. Mexico’s 66th president, Claudia Sheinbaum, who became the country’s first female head of government when she took office in October 2024, has stepped into a potentially hostile international climate, where egos, economic protectionism and Elon Musk are just a few of the volatile ingredients in the geopolitical cocktail. A scientist and an academic, as well as a politician, Sheinbaum won a landslide victory in the June 2024 election against National Action Party (PAN) candidate Xóchitl Gálvez and now leads the National Regeneration Movement (Movimiento de Regeneración Nacional), commonly referred to as Morena, in a three- party coalition.
As one of the most powerful women in the world, she must craft both a domestic policy and a
foreign policy that will enable Mexico to play to its strengths, build solid international relationships, and secure the foundations for economic growth. No easy feat, given the unpredictable and highly adversarial state of global politics. On the domestic front, Sheinbaum’s priorities
will share much with previous regimes. Notably, combating crime will be high on the agenda, and she has announced a bold data-driven strategy that will focus on improvements in policing and intelligence, as well as increases in social spending to tackle the causes of crime. One departure from her predecessor’s
approach to organised crime – ‘abrazos, no balazos’, or ‘hugs, not bullets’ – is a much tougher approach that emerged in the first few weeks of the new regime. Sheinbaum has already had to defend violent confrontations between government forces and criminal gangs, in which the capture of cartel members resulted in civilian casualties. Her message is clear – she is cracking down on crime, particularly drug-related crime. Alongside a programme of government reform, which includes a bill asserting constitutional supremacy set to limit legal challenges to constitutional amendments, Sheinbaum is also trying to simplify several government functions
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