The flow of the Mexican economy is gradually slowing down as President Claudia Sheinbaum aims to advance growth via higher levels of new private investment in the United States. The IMF recently predicted that Mexico would reach only around 1.5% in 2024, from 3.2% in2023 because of certain capacity issues as well as tight monetary policy.
To address the identified economic challenges, Sheinbaum has launched a strategic session with representatives of Mexican and American private companies. The event started Monday evening at the Soumaya Museum in Mexico City and seeks to establish a platform for investment and promote new projects between the two countries.
Foreign Affairs Secretary Juan Ramón de la Fuente and Economy Secretary Marcelo Ebrard invited top executives to a selected dinner reminding them that business is important to the new government. Ebrard insisted that major messages on energy, judicial reform and the review of NAFTA free-trade treaty with the United States are yet to come.
The summit could not have come as a time when the Mexicos economy is most in need of direction. This loss of growth dynamism in terms of consumption and investments has led to downwards adjustments in GDP growth rates for the country. The incoming government also has to contend with one of the worst fiscal deficit figures in the last 36 years at 5.9% of GDP.
Sheinbaum’s administration believes that an uplift of the economy will be achieved through the boosted US private investment. In her Monday morning press conference, the president said there would be more binational investment to be announced and an approach towards more intertwining of Mexico and the United States under the auspices of the trade deal.
Thus, the matters on the way to higher investment are not so clear-cut. Some questions related to the behaviours of investors were raised due to the continued uncertainty regarding the implementation of the judicial reform in Mexico the existence of other possible changes like the abolishing of independent agencies has also led some investors to adopt the wait and see approach due to lack of adequate information.
Nevertheless, currently Mexico is the US largest trading partner and Sheinbaum is willing to strengthen this trend. It is noteworthy that the administration is actively preparing the necessary conditions for private investment at the same time, along with introducing relevant legislation to speak of balanced development.
Continuing the summit, businessmen and officials will talk about the participants’ critical concerns, such as promoting better border crossing or launching digitalization initiatives. The results of these discussions become a focus of interest for economists and investors in search of potential strategies for further development of Mexico’s economy for the rest of 2024 and beyond.
The timing of this summit is specially chosen due to the forthcoming US elections regarding America’s election policy towards Iran. This has suggested that Mexico may hold the golden key in determining how it will harness and continue to manage to attract the much-needed US investment, given the limberness of politics in the US.
At the same time, Sheinbaum’s administration will have to steer through these intricate economic factors to achieve essential objectives of the revitalization of the growth rate through the stimulus of the US investment; this will define the Mexican economy’s performance in the years to come. The effect of determining and satisfying its needs for foreign investment and submission to the priorities of domestic economic advancement will well be observed in the future by both external and internal onlookers.
