The debacle in the markets this Monday, June 13, could be the first red flag that anticipates what some influential and lofty leaders of international financial firms have been predicting for several days: that an economic hurricane of singular force is coming, that will shake the world.
The economic recession, it has been said, is a ghost that haunts the world. The big question is whether Mexico is well positioned to face the effect of a strong crisis like the one that is forecast could occur?
Recently, the Secretary of Finance and Public Credit, Rogelio Ramírez de la O, admitted that the Mexican economy is not in an ideal situation. He acknowledged that it has been difficult to recover the production levels that were registered before the pandemic.
When participating in the National Meeting of Regional Directors of BBVA, he clearly stated that more time is needed to “sing full recovery in all sectors”.
The realistic diagnosis of the head of public finances is worrying, but the deterioration of the national economic growth forecasts for the end of this and next year is more worrying. Without a doubt, the main weakness of the Mexican economy is the minimal growth it is registering.
Nobody knows if the scenarios of an economic hurricane will be fulfilled or not. But what is known is that global inflation, the disruption of supply chains, and the rise in the international price of oil, which is trading at around $120 per barrel, continue to wreak havoc on the international economy.
In the next few hours, the United States Federal Reserve will raise its interest rate.
Most analysts believe that it will increase by 50 basis points, although there are those who believe that the increase could be 75 basis points, after it was announced last week that general inflation at the end of May reached 8.6%. , its highest level in 40 years; core inflation stood at 6.0%.
The Fed is about to make a move that will mark the beginning of a series of sharp hikes and could, in an attempt to bring down inflation, trigger an economic recession in the United States.
And with this it could cause negative effects in other countries of the world and Mexico among them.
Without being catastrophic, there are obvious elements that suggest that we are facing a very delicate circumstance at a global level and that the main factors that are generating the turbulence: the global inflationary phenomenon, the Covid-19 pandemic and the war between Russia and Ukraine , they do not have a scenario in the short term for them to fade away.
This set of factors plus the effects they have caused and continue to cause in the world economy are causing uncertainty to spread globally, considered the worst poison for investment and production.
Mexico does have one strength: its macroeconomic stability. But it also has a marked weakness: its stunted economic growth. Analysts, international organizations and the Bank of Mexico (Banxico) itself have been adjusting their projections of the Gross Domestic Product (GDP). The consensus of these forecasts is between 1.2 and 2.2 percent.
Banks such as Banorte, Barclays, Citibanamex, BBVA, HSBC and JP Morgan cut their GDP projections from January to June.
Also the Mexican Institute of Finance Executives (IMEF), the Bank of Mexico and organizations such as the International Monetary Fund (IMF), the World Bank and the Organization for Economic Cooperation and Development (OECD) revised their expectations downwards.
In recent days, the governor of Banxico, Victoria Rodríguez Ceja, although she acknowledged that there is a scenario of lower growth, higher inflation and high uncertainty, said that in her scenario she does not see a recession.
Hopefully the person in charge of monetary policy is not mistaken. Hopefully the Federal Reserve is not wrong either and manages to apply a policy that allows reducing inflation without falling into recession.
But faced with the uncertainty caused by the prolongation of all the factors that are undermining the stability of the markets, it would be better for Mexico to have an emergency plan. At the time
Journalist
Rich and Powerful
He has worked continuously in newspapers, magazines, radio, television and the Internet, in the last 31 years he has specialized in business, finance and economics. He is one of the three hosts of the program Alebrijes, Águila o Sol, a program specialized in economic issues that is broadcast on Foro TV.