President López Obrador reiterated today that he expects the Mexican economy to grow by 2% this year even as the International Monetary Fund (IMF) cut its growth forecast to 0.9% from 1.6%.
Speaking at his morning press conference, López Obrador said that his outlook for 2019 GDP growth was unchanged and that he didn’t trust organizations such as the IMF.
“Yes, I’m still the same. Look, I don’t have a lot of confidence in those organizations, with all respect. Those organizations were the ones that imposed the neoliberal economic policy that caused a lot of disasters in Mexico,” he said, arguing that they owed the country an apology.
The president charged that policies supported by the IMF and other international financial organizations, such as the previous government’s structural reforms, triggered an increase in insecurity and violence.
“So, how can they give an opinion? What moral authority do they have?” López Obrador asked.
“We’re not going to give up [membership of] these organizations. We’re part of the global financial system but that doesn’t mean that we don’t know what their policies have meant.”
The president was also critical of the use of GDP growth as a sole yardstick for development, stating that his government will also focus on improving salaries, the distribution of wealth and access to health and education services.
In its World Economic Outlook report published today, the IMF said that investment in the Mexican economy remains weak and private consumption has slowed.
The situation reflects “policy uncertainty, weakening confidence and rising borrowing costs, which could climb further following the recent sovereign rating downgrade,” the IMF said.
The prediction of 0.9% growth is less than half the 2.1% economic expansion the IMF forecast in January and a 0.7% cut on its April outlook. The IMF maintained its growth outlook for Mexico in 2020 at 1.9%
If the organization’s forecast for this year proves correct, growth will be the weakest in nine years.
The IMF also cut its forecast for global growth for this year and next, citing United States-China tariffs and the possibility of a disorderly exit for the United Kingdom from the European Union, among other factors.
It predicts 3.2% global growth this year and 3.5% in 2020, a 0.1% cut for both years compared to the April outlook.
The IMF raised its 2019 outlook for the economy of the United States, Mexico’s largest trading partner, to 2.6% from 2.3% in April but maintained a 1.9% growth forecast for 2020.
It cut growth expectations for Latin America from 1.4% in April to just 0.6% but predicted growth would recover to 2.3% in 2020.