Hence, “the greatest risk (for the Mexican economy) is not a slight recession in the US, but rather that Mexico deteriorates its commercial relationship with the United States, that economic sanctions, fines are generated or, in an extreme case, that Mexico leave or be removed from the T-MEC ”, Siller said in a virtual conference.
remittances
The fact that the unemployment rate remains low in the US labor market for Hispanics and Latin Americans is good news for Mexico, because money transfers will continue, Banco Base anticipated.
Despite the economic slowdown that is seen for the United States, as a result of the tightening of the monetary policy of the Federal Reserve (Fed), which seeks to bring inflation to the target of 2% average, it is expected that an increase in the arrival of remittances to Mexico.
Banco Base projects that this year more than 58.1 billion dollars (million dollars) of remittances will reach the country, with a growth of 12.8%, compared to the 51.594 million dollars that arrived last year.
“For the following year, we believe that they will continue to increase around 7%, that is, there will be a slowdown, but remittances will continue to arrive in our country,” Gabriela Siller anticipated.
USMCA
The energy issue, for which the United States and Canada asked Mexico for consultations to find a solution without having to reach a panel of experts, could lead to sanctions against Mexico.
One factor that can play against Mexico has to do with the elections in the United States, which is about to hold mid-term elections and in 2024 will elect a president.
If the Republicans are winners in the midterm elections, Joe Biden could get “tougher” to encourage the US economy and pressure Mexico to fulfill its T-MEC commitments, Siller considered.
“What I could do is end up imposing fines if this (the energy conflict) reaches a panel, and the fines would have to be paid by the federal government, which would put even more pressure on (Mexican) public finances and from the other lake it would win some votes (for Biden)”, estimated Gabriela Siller.
