The government of Claudia Sheinbaum has unveiled its first economic plan.
This is the initial test for Finance Secretary Edgar Amador, who must gain credibility and trust from financial markets.
Economic Context
The presentation of this economic package comes in a challenging context, both externally and internally. Externally, the focus is on tariffs that President Donald Trump will announce on April 2nd. Internally, Mexico faces significant economic slowdown.
Key Economic Expectations
- Growth Projection: Despite private analysts’ and Banco de México’s more pessimistic forecasts (0.6% growth), Amador maintains an optimistic tone, predicting a 1.5-2.3% GDP growth.
- Fiscal Discipline: The government reaffirms its commitment to reducing the fiscal deficit from nearly 6% (inherited from the previous administration) to 3.9-4.0%, signaling a responsible approach to maintain sustainable debt levels.
Amador argues that internal demand and public and private investment will drive economic growth, despite global trade tensions and geopolitical conflicts. He believes Mexico’s diversified economy and robust domestic market enhance its resilience against international shocks.
Market Response
Private sector analysts have recently revised their growth projections for 2025, expecting a mere 0.50% increase this year, down from 0.81%. Additionally, early indicators suggest a contraction in the first quarter of 2025.
This pessimistic outlook contrasts with the government’s optimism. The international environment remains complex, and domestic economic performance is weak.
ABM Leadership Changes
- New ABM President: Emilio Romano will lead the Association of Mexican Banks from 2025 to 2027, with vice-presidencies assigned to representatives from various banking groups.
