Everardo Elizondo, former deputy governor of the Bank of Mexico, estimates that this year the growth of the Mexican economy will be lower than in 2023.
By JOSÉ ÁNGEL DE LA PAZ | EGADE BUSINESS SCHOOL
EGADE Business School and the School of Government and Public Transformation (EGyTP) of Tecnológico de Monterrey presented the first “Mexico’s Economic and Political Outlook for 2024” forum in Mexico City.
At the event, which included a keynote and a panel, academic leaders and professors from both schools and experts from the financial and consulting sectors agreed that the Mexican economy did not grow as projected last year, while this year’s growth rate is not expected to exceed 2.2% due to the economic slowdown, elections, and the increase in illegal economic activities.
Nos reunimos para analizar posibles escenarios a los que nos enfrentaremos en los próximos meses, abrió @H_Arredondo, decano de #EGADE. Entre algunos destacó:— EGADE Business School (@egade) January 18, 2024
-Elecciones en el 🌎 pic.twitter.com/vHQi4QjPSH
In his welcome message, Horacio Arredondo, dean of EGADE Business School, stated that if the country continues to grow at an annual rate of approximately 2%, the average over the past three decades (1980-2020), “we are going to need 40 years to reach the level required, which would make Mexico more prosperous and more egalitarian.”
The Dean estimated that the environment of disruption and accelerated volatility in the economic and political spheres will continue to set the trend for 2024, especially since this is an electoral “super year” with elections being held in many countries and regions worldwide.
In a world of political polarization like the current one, public opinion is contaminated by fake news and disinformation seeking to destabilize the electoral processes,” said Arredondo. “We need to monitor how they develop closely and also envision the various possible scenarios.”
THE OUTLOOK FOR A YEAR OF TRANSITION
In his keynote “Contrasts in the Mexican economy at the close of the six-year presidential term,” Everardo Elizondo, former deputy governor of the Bank of Mexico and distinguished professor at EGADE Business School, estimated that Mexico’s economy will grow at a lower rate this year compared to last year, while bank interest rates are expected to drop to 9.5% by the first quarter of the year.
“The economy for 2024 will not change from what it is today; this is due to the impact of COVID-19, the lack of economic acceleration, and a lack of expectations. This is what causes the GDP per capita to stagnate despite population growth,” the economist said.
La economía norteamericana es más dinámica y flexible y su capacidad de reacción luego de la pandemia fue sorprendente. La recuperación en el caso de México ha sido cada vez más lenta, reflexionó @EverElizondoA, profesor de #EGADE. pic.twitter.com/qK63JLxkoO— EGADE Business School (@egade) January 18, 2024
Elizondo also joined the panel of experts, moderated by Miguel Ángel Santos, dean of the School of Government and Public Transformation, and with the participation of Carlos Elizondo Mayer-Serra and Jesús Silva Herzog-Márquez, EGyTP professors; Janneth Quiroz, director of Economic, Exchange and Stock Analysis at Grupo Financiero Monex; and Jorge Castilla, Managing Director of Accenture México.
Elizondo Mayer-Serra stressed the opportunity the next Mexican administration will have to rethink the energy agenda, given the fiscal pressures of Pemex and the need for clean energy and alternatives to address the security challenge.
Regarding GDP growth, Quiroz explained that the effects it will have on demand, consumption, and gross fixed investment have reached all-time highs.
“On the upside, there will be progress and an increased productive capacity in Mexico. On the downside, we have a foreseeable slowdown in the US caused by high interest rates, which will directly affect Mexico, as well as higher public spending that will have a favorable impact on this estimate,” said the EGADE Business School Master of Finance graduate.
For his part, Silva Herzog-Márquez referred to the threat to democracy by centralizing power and the importance of recovering plurality in legislatures.
Castilla affirmed that the near future holds the arrival of a profound manufacturing 4.0 related to supply chains, which will use the cloud and advanced Artificial Intelligence (AI) models to achieve balance.
“The talent and education we enjoy in Mexico are the most important factors. Just 2% of the economically active population is conversant with computers and technology, which translates into one million 100 thousand people, and our country requires far more than that. This affords us a magnificent opportunity if we can achieve it,” the manager added.
The second “Mexico’s Economic and Political Outlook for 2024” forum will take place on January 25 at the Monterrey site of EGADE Business School, also with the participation of Horacio Arredondo, Miguel Ángel Santos, Everardo Elizondo and Jesús Silva Herzog-Márquez, as well as René Cabral, professor at EGADE Business School; Juan Pablo García, general director of CAINTRA; and Clelia Hernández, general director of the Nuevo León 4.0 initiative.