Supporters of President López Obrador attribute to Covid-19 the poor performance of the Mexican economy during the first half of his government.
“Our purpose is to grow, on average, 4% during the six-year term, double what was grown in the neoliberal period,” López Obrador said before the businessmen of the Confederation of Industrial Chambers, on June 10, 2018. He spoke as virtual president-elect, a week after his resounding victory in the elections.
The 4% goal was later reflected in the National Development Plan 2019-2024, approved by the Chamber of Deputies a year later. So, there were already clear signs of the slowdown in the Mexican economy, which for the new government represented only a bump in the road.
In the Plan, he assured that the growth rate would pick up, that in 2024 it would reach 6%, “with a six-year average of 4%”. At the same time that he announced the end of neoliberal policy, he promised that at the end of the López Obrador government, “the Mexican economy should have grown more than twice as fast as population growth.”
An annual growth rate of 4% meant that at the end of López Obrador’s administration he would leave behind an economy 26.5% larger than the one he found. The goal was ambitious, but not impossible. During the administration of Carlos Salinas de Gortari, Mexico had an accumulated growth of 25.9%; with Ernesto Zedillo a 22.2 was reached, despite the Tequila Crisis.
Three and a half years of the López Obrador government have passed. Independent analysts have more and more data with which to feed their models and fine-tune forecasts of how the economy will arrive in 2024. After the presentation of the Gross Domestic Product (GDP) for the first quarter of 2022, a single word describes the panorama: disappointing .
Of course, the figures vary a bit from one source to another. The International Monetary Fund (IMF) forecasts that the Mexican economy will grow 2% this year and that in 2023 it will finally return to the size it had in December 2018. Moody’s and BBVA Research are less “optimistic”; They anticipate that Mexico’s GDP will return to the level left by Enrique Peña Nieto until 2024.
How will López Obrador leave the Mexican economy when his government ends? BBVA Research estimates that between 2019-2024 Mexico will have an accumulated growth of 1.6 percent. Other forecasts from independent analysts may be more optimistic, but not much different. In all cases, the projections are well below the lowest accumulated growth in a six-year period of the “neoliberal period: 12.5% of Felipe Calderón.
In fact, in what remains of the López Obrador government, expectations have been reduced to surpassing the performance of the economy during the lost six-year term of Miguel de la Madrid; period in which Mexico had an accumulated growth of only 1.1 percent.
Supporters of President López Obrador attribute to Covid-19 the poor performance of the Mexican economy during the first half of his government. Of course, the pandemic caused a global recession. However, as the data arrives from other countries, the government of the Tabasco politician comes out very badly.
According to BBVA Research, of the six largest economies in Latin America, Mexico was the only one that closed 2021 below the level it had before the pandemic. It registered a -2.4%, when Chile was already 9.7 above, Colombia 9.3, Peru 9.1, Argentina 7.8 and Brazil 2.8. The figures speak eloquently of what was done to contain the damage caused by the pandemic and promote economic recovery.
If the six-year term were a soccer game, we could say that we are 30 minutes from the end. There is still time for changes. Without expecting miracles, President López Obrador could save face and prevent his six-year term from going down in history as the period of the Great Disappointment.
*Professor at CIDE.
Twitter: @BenitoNacif
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Dr. Benito Nacif is a professor in the Political Studies Division of the Center for Economic Research and Teaching (CIDE). He was Electoral Counselor of the National Electoral Institute (INE) from 2014 to 2020 and of the Federal Electoral Institute (IFE) from 2008 to 2014.