The State of Mexico's Economy

The Wilson Center's Mexico Institute was pleased to host an event with the International Monetary Fund's Mexico team, who presented the conclusions of the recently-completed 2016 Article IV consultation with Mexico.

Mexico's economy has been growing at a moderate pace, inflation is low, and the unemployment rate has been declining. Fiscal consolidation has begun and the financial system remains strong and resilient to severe shocks. It would be critical to adhere to the planned fiscal consolidation to put the public debt ratio on a downward path, and take steps to strengthen the commitment framework for fiscal policy. Steadfast implementation of the plan to reform PEMEX and strengthen its financial viability is also important. Future monetary policy decisions should continue to be guided by the objective of keeping inflation expectations anchored, while clear communication by the central bank is critical. The exchange rate should continue to act as the key shock absorber to help the economy adjust to external shocks. Significant progress has been achieved in strengthening financial sector prudential oversight but some gaps remain, especially in the governance framework of CNBV and IPAB. On the structural front, strengthening the rule of law and boosting female labor supply would boost potential output and reduce inequality and poverty. Going forward, Mexico will need to navigate an uncertain and complex external environment, with elevated risks of protectionism and heightened global financial market volatility.

Speakers

Robert Rennhack
Deputy Director, Western Hemisphere Department, IMF

Costas Christou
Advisor, Western Hemisphere Department, IMF

Alex Klemm
Senior Economist, Western Hemisphere Department, IMF

Damien Puy
Economist,Western Hemisphere Department, IMF

Fabian Valencia
Senior Economist, Western Hemisphere Department, IMF

Commentator

Christopher Wilson
Deputy Director, Mexico Institute, Wilson Center

Moderator

Duncan Wood
Director, Mexico Institute, Wilson Center