Although Mexico can attract investments due to its proximity to the U.S., much remains to be done and there are issues to address, such as energy and infrastructure, noted the organization.
Despite the Mexican economy growing more than anticipated, there is a risk of not fully capitalizing on the opportunity to attract investments driven by supply chain relocation to be closer to the U.S. market, a phenomenon known as nearshoring, warned the International Monetary Fund (IMF).
“Mexico is growing more than we expected in the past. It is an economy that to some extent is benefiting from being so close to the United States in this era of more turbulent trade flows due to geopolitical considerations. And I would say one of the risks is that Mexico doesn’t fully seize the opportunity it has; it has been taking advantage, but there is still much to be done,” stated the Director of the Western Hemisphere Department of the IMF, Rodrigo Valdés.
In a press videoconference discussing the economic outlook for Latin America and the Caribbean, within the framework of the IMF and World Bank Spring Meetings, he explained that the international organization has already assessed the bottlenecks in the Mexican economy, for example, in energy and other infrastructure.
However, the executive pointed out that from a broader perspective, the central bank has done a very good job, and in terms of fiscal and public finance issues, “we believe fiscal policy is procyclical this year. We would prefer to see something different, but it’s already in place, although we expect substantial consolidation by 2025,” he noted.
Regarding the recent diplomatic differences between Mexico and Ecuador, “the first thing I want to mention is that we are closely monitoring events at the Mexican embassy in Ecuador and hope that this matter can be resolved through diplomacy and in accordance with international norms,” he said.
Fuente: forbes.com.mx