Economic growth estimates for this year continue to be revised downwards. The latest survey conducted by Citibanamex among 34 private sector analysts, published on April 5, shows a median of 1.9%, 0.1 percentage points lower than the previous survey, with the lowest forecast being 1.1% and the highest 2.3% ( in the survey carried out by the Bank of Mexico, the median is 1.8%, while in the previous survey the median was 2%.
On the other hand, the Ministry of Finance also revised downwards its forecast from 4.1 to 3.4%, which, as can be seen, is too optimistic, is very far from the forecasts of private analysts and it is impossible for it to materialize (not even praying to Saint Jude Tadeo, the saint of lost causes).
There are several factors that have led to the forecasts being revised downwards, highlighting the Russian invasion of Ukraine (with the impact that this has on the price of different goods such as oil, gas, wheat, corn, metals with industrial use , etc.), the beginning of monetary normalization in the United States and, above all, the continuous and accelerated process of institutional destruction in Mexico, the work and grace of the government of President López.
The latest examples of this institutional deterioration and the rule of law are the extremely serious statement by the president himself “don’t tell me that the law is the law, don’t tell me that the law is the law”, the impudent violation of the Constitution and electoral laws by federal and state public officials advertising in favor of “ratification” together with the continuous beating of the INE and the atypical method, really surreal, of how the votes of the voters were counted. ministers of the Court in the discussion on the reforms to the Electricity Industry Law (LIE) an armed theater to avoid declaring it unconstitutional in general, a method that consisted of voting separately regarding article 4 of the Constitution (the right to a healthy environment) and what is related to 28 (what is related to competition). In this regard, see the article by Ana Laura Magaloni Four votes? in the Reformation newspaper.
Regarding the latter, the vote in the Court implies that, by majority, the reforms to the LIE were declared unconstitutional, but since they did not obtain the eight votes to achieve a qualified majority, general invalidity could not be decreed. This does not imply, as several in the government affirm, that the reforms to the law are constitutional. This leaves us in an impasse full of uncertainty where the future of the reforms will be settled with the amparos filed and how these are judged in the courts and in the Court itself where finally, by jurisprudence, the rule is declared unconstitutional. .
Likewise, it will be necessary to see in this period what actions the government, the CFE, the CRE and the CENACE try to take in the implementation of the law, particularly in the cancellation/renegotiation of contracts with private generators and the order of dispatch by type. of generator, all subject to the possibility that temporarily nothing can be done if definitive suspensions are decreed in general in the amparos filed. And we must not ignore the possibility of international litigation being triggered under international treaties, mainly those signed with States and Canada and with the European Union. Additionally, we will have to see what happens this week in the Chamber of Deputies with the president’s proposal for constitutional reform on the matter.
This impasse and the consequent uncertainty will undoubtedly have a certain consequence: investment in the economy, which began to show a clear negative trend after the arbitrary and illegal cancellation of the airport in Texcoco, will remain stagnant at very low and insufficient levels. for the economy to grow. Not only will there be no private investment in energy, there will also be no investment in many other sectors. We already knew that this was a lost six-year term; the decision of the Court predicts that it will be many more years.
Economist and professor
Point of view
Knight of the National Order of Merit of the French Republic. Medal of Professional Merit, Ex-ITAM.