Mexico’s economy might grow by 2.4 percent in 2024. Yet, it faces hurdles from the finances of Petróleos Mexicanos (Pemex) and severe droughts.
This comes from a Tuesday alert by the Mexican Institute of Finance Executives (IMEF).
José Domingo Figueroa, the president of the IMEF, shared insights during a monthly review and praised Mexico’s vibrant service industry.
However, he mentioned a slowdown in manufacturing. This slowdown ties back to the U.S.’s tight monetary policy.
Figueroa pointed out Pemex’s situation as a key concern. Despite high oil prices, Pemex’s recent numbers show falling cash flows. This is troubling, even with federal aid.
Without financial improvement, Pemex will need more government support. Figueroa warned that this scenario could strain Mexico’s budget.
Droughts are another issue. This year’s droughts have hurt crop yields, which could push up demand and prices for goods.
Moreover, Mexico’s currency is weakening against the dollar. This drop, influenced by U.S. politics, could make farm imports pricier. It hints at a slower rate cut cycle than planned.
Looking ahead, IMEF predicts a 1.9 percent growth for Mexico in 2025.
Last year, the nation’s economy expanded by 3.2 percent, securing its spot as Latin America’s second-biggest economy, trailing only Brazil.
The Mexican government forecasts growth between 2.5 and 3.5 percent in 2024.
These projections show the interconnectedness of global politics, agriculture, and energy in Mexico’s economy and underscore the importance of addressing these challenges for steady growth.