The states of Campeche and Tabasco, heavily dependent on oil activity, are experiencing a rapid decline in their industrial activity, especially in the construction sector. With Trump's victory in the United States, the growth prospects for Mexico could change, and not necessarily for the better.
Comparing the first four years of Trump's presidency, from 2017 to 2020, with what could happen in the next four years is complicated due to the influence of the pandemic in 2020. However, if we focus on the quarters from 2017 to 2019, Mexico's average quarterly annual growth was 1.2 percent, but that average fell to 0.4 percent in the four quarters of 2019, coinciding with the first year of López Obrador's government.
It is essential to consider that the lack of investment due to distrust in the new government was an internal factor that impacted the low growth of the Mexican economy in 2019. There is a possibility that, by 2025, factors such as the distrust generated by internal reforms and violence in Mexico, combined with Trump's threats to impose tariffs on Mexican cars, could further slow down the economy.
In this context, the optimal strategy for Claudia Sheinbaum's government would be to significantly increase public investment, promote public-private partnerships, and create a trustful environment in the domestic market. Infrastructure projects such as the port of Salina Cruz in Oaxaca and the interoceanic train between Veracruz and Oaxaca could boost the economy and trade in Mexico.
Although an annual growth of 1.5 percent managed to halt the economic slowdown at the end of 2022, growth expectations for the entire year remain moderate. The survey from the Bank of Mexico to private sector economic experts reflects a growth forecast of 1.41% for 2024 and 1.22% for 2025.
Regionally, significant differences in industrial growth are observed among Mexican states. According to the Monthly Industrial Activity Indicator by Federative Entity (IMAIEF) from July 2024 by INEGI, while some states show growth above 20%, others register negative rates of up to 30%.
The case of Oaxaca stands out, whose industrial activity has maintained positive growth rates thanks to investments in sectors such as construction, infrastructure, and manufacturing. On the other hand, states like Campeche, Nayarit, and Tabasco show a constant decline in their economic activity, which represents a challenge.
Mexico's success in countering the negative effects of Trump's presidency in the coming years will largely depend on the promotion of sustainable projects through public-private investment, driving economic growth and countering possible adverse impacts.
