In Mexico, recent changes involving the disappearance of autonomous bodies and the deterioration of the Judiciary could cause impacts on the economy in the coming years. An economic crisis in the country could arise from a crisis of confidence, which would trigger adverse effects in various areas.
The Mexican economy had experienced strengthening due to elements that increased the confidence of both national and international investors. This translated into a reduction of country risk and improvements in the government's credit ratings. However, a setback is currently observed in many of these aspects, raising the possibility of an economic crisis in Mexico.
With 30 years since the last internally generated economic crisis in the country, it is suggested that a new crisis could stem from a widespread lack of confidence. Although there is no certainty about the materialization of this scenario, it is necessary to consider the real possibility that Mexico may face an economic crisis in the near future.
The increase in the fiscal deficit could generate distrust and lead to a vicious cycle of greater indebtedness, high-interest rates, and a deterioration in public finances. Nevertheless, the strengthened institutional situation and the certainty it provides to economic markets are aspects that could counteract a possible economic crisis in the country.
However, various economic indicators suggest that the Mexican economy is entering a recession, which could negatively impact public finances in the short term. The reduction of the deficit in a context of low economic activity represents a challenge for the governments, as measures such as tax increases or spending cuts can negatively impact economic growth.
Events such as the financial crisis of 2008 and the pandemic of 2020, while not caused by internal problems in Mexico, highlight the vulnerability of the economy to global situations. The current destruction of the institutional order and the lack of confidence from investors and financial markets could accelerate a deterioration in economic conditions. Problems at Pemex and the possible difficulty in refinancing public debt due to a loss of confidence also represent threats to the country's economic stability.
In summary, the possibility of an economic crisis in Mexico is real and is influenced by both internal and external factors. Despite having implemented institutional improvements in recent decades, the observed setback in some key aspects of the economy raises questions about the country's economic stability in the immediate future.
