The country shows notable strength after abandoning the IMF’s “recipebook”

Mexico City. The Mexican economy has shown a fortaleza notable In a complex international environment, it has grown for three years in a row above its historical average, due to the fact that the current administration promoted serious structural changessaid Rogelio Ramírez de la O, Secretary of Finance and Public Credit, at the Council of the Americas conference in Mexico City.

“I emphasize the term ‘seriously’ because this is a Mexican (economic) design,” said the official. Many years ago, Mexico followed with the rest of Latin America a recipe for structural adjustment that was based on the Washington Consensus because that was the common problem of the countries of Latin America, but for many years now each country has been facing different situations.stressed Ramírez de la O, during his presentation.

It is known as the Washington Consensus – privatization of public companies, commercial and financial liberalization, cutting public spending to pay the debt and withdrawal of the State from economic activity – a decalogue of measures promoted by international organizations, led by the Monetary Fund. International at the end of the 80s of the last century. Among other recommendations, it emphasized fiscal discipline; the growth of the tax base; the liberalization of interest rates; the free floating of the exchange rate and the liberalization of international trade (elimination of tariffs and quotas).

In front of the audience of the Council of the Americas – a US business organization – the secretary highlighted that the economic model that is now implemented in the country is based on four pillars of growth: strengthening the income of households in the lowest deciles; develop regional projects in the most disadvantaged areas of the country, using the budget; reinforce economic policies on the supply side and have balanced public finances.

In his presentation on the strengthening of household income in the lowest deciles, Ramírez de la O highlighted that this policy has helped consolidate consumption as one of the greatest drivers of growth in the country, since this indicator has had growth above its historical average and now represents around 67 percent of the gross domestic product (GDP).

The secretary added that the Mexican economy is benefiting from the relocation of supply chains, from trade agreements that open a direct path to dozens of markets and from its own macroeconomic fundamentals. Foreign direct investment (FDI) has given Mexico its vote of confidenceto such a degree that this year it could exceed the historical flow that it reached in 2023, he assured.

Months before the end of the administration of President Andrés Manuel López Obrador – which until 2024 had been governed by a policy of fiscal discipline, even in the most critical period of the coronavirus pandemic – the secretary has made more than one public intervention emphasizing that the recipe books of three decades ago promoted by financial organizations were left behind.

A little over a week ago, when asked by the Atlantic Council about a public deficit expected at 5.9 percent at the end of this year, Ramírez de la O emphasized that in the current administration we are not copying the framework of the 90s (bit.ly/49OrUWG).