It would not be remote that, in the second half of 2024, the Mexican economy would show a situation of low growth.
Most analysts see two stages in the dynamics of productive activities this year.
One with greater dynamism in the first semester, associated with the spending schedule related to the electoral process, and another with lower activity in the second half, both for the end of the current administration and for the start of a new one that begins in October of this year.
Suppose that the growth rate in the second quarter was 3 percent (in the first, GDP grew 2.0 percent) at an annual rate and consider that it dropped to 1.5 and 1 in the third and fourth quarters, respectively.
Then, the average annual rate would reach 1.9 percent.
According to the survey among specialists that Banxico published a few days ago, the consensus at this time is 2.25 percent for this year, but it should be noted that in February it was 2.4 percent, so a downward trend is seen.
The reason for foreshadowing this behavior has to do with the end of the spending of the electoral period on the one hand and on the other, with the natural learning process of spending for the new administration.
In the Quarterly Report from Banxico, corresponding to the first quarter of 2024, the following is stated, for example: “For the second half of the year, a slowdown in productive activity, in congruence with the evolution that has been observed in previous electoral episodes. Regarding external demand, it is expected that this will present weakness during the year.”
Banxico, however, continues to estimate GDP growth for this year that would fluctuate between 2.2 and 3.4 percent. My impression is that in the next Quarterly Report there will be a downward correction.
It will be the first time in history that everything the fourth quarter of the year corresponds to the new government, Well, in the past, it was only the month of December, which means that the exercise of annual spending was practically carried out in its entirety by the outgoing administration.
Although there is an inertial expense that will continue, regardless of the change of administration, it is natural that there will be a learning process on the part of the executors of public spending, Therefore, this time even the slowdown in the second semester could be greater than that observed in previous electoral episodes.
It must also be added that the coincidence of the presidential election in the US With the Mexican election, this time it could also bring with it ingredients of uncertainty.
If the election did not involve a character like Donald Trump, who is still the candidate with the greatest probability of winning, perhaps the effect would be less.
However, according to the most recent polls, the Republican candidate is ahead In the seven states called ‘hinge’, whose electoral votes tend to be decisive in the final result.
In four of them, Arizona, Georgia, North Carolina and Nevada, the advantage is more than 3 points. In three of them, Pennsylvania, Michigan and Wisconsin, the advantage is 1 to 2 points.
If this condition were to remain, it is feasible that we would have a final quarter also affected by the uncertainty derived from Trump’s strident language regarding the application of tariffs, protectionism and xenophobia.
Finally, it should also be noted that the effect of nearshoring The investment has taken longer than many expected, so it will surely not yet be perceived significantly in this year’s GDP growth.
