By stagflation we mean inflation, slow or no growth, and high unemployment. There is increasing evidence that developed economies are slowing down in an environment of high levels of inflation.
In the case of Mexico, it is clear that it is already experiencing clear stagflation. Our case is emblematic because we should have been the beneficiaries of the reconfiguration of international production chains as a result of the intermittence that we have seen in the last three years, as well as the war in central Europe. Having a preferential trade agreement with the US and Canada is so that at this time we are receiving the research, development and production of companies like Apple, which has decided to close its production in China, or the medicines that will be consumed for decades in the northern and central region of the continent. We have experienced it in a lot of politics and nothing in economics, therefore, the country is not a relevant actor in terms of technology, innovation in the financial system, health, food and environmental protection. In economic matters, since the start of the current government of President Andrés Manuel López Obrador, it has been difficult for us to call things by their name. Thus, it was difficult to admit that between 2018 and 2019 we are witnessing a recession and that both public and private investment have done nothing but systematically fall as a result of the inadequate business environment and the lack of compliance with the rule of law. The same can be seen with the rating of the sovereign’s debt, where by not losing the investment grade we fail to see the reality that at this time there is no possibility of raising the rating.
Three Secretaries of the Treasury, Carlos Urzúa, Arturo Herrera and Rogelio Ramírez de la O in little more than three years can open up a space for us to reflect on whether, beyond the cover of macro aggregate figures, things in our economy have been in the right direction. correct. The budgetary discipline that the president has displayed is to be applauded, although in relation to GDP, there was no government indebtedness during the pandemic, too; Mexico was the OECD economy that fell the most, making the recovery almost non-existent. The economic world still does not want to see that the global economy is on the precipice of recession, inflation, poverty and marginalization and there is no way to stop the fall. In this environment, the country has just fallen -7% from Q418 to Q421 when Turkey and Finland grew 17 percent. Conformism and complacency do not help those of us who have tried to help the government or companies in their decision making. The historical situation to be actors in the new conformation of the global economic architecture with the government of change that we have had for four years, are sufficient elements to act forward, because of remittances, some tourism and exports we cannot continue living and less lift millions out of poverty.
Doctor of Economic Development and Law and Philosophy
AUCTORITAS
Professor at the Universidad Panamericana, Ibero and TEC. He has worked at the Bank of Mexico, the Ministry of Finance, the Presidency of the Republic and in Washington, DC. He is the author of books on economic history, financial regulation, monetary policy, economics, and ethics.