The outlook for international trade continues to be pessimistic in different latitudes; the powers of China and the United States reactivated trade tariffs; the ratification of the T-MEC in North America is still pending, and in Europe, protectionist parties gained strength after the "Euro-elections".

Photo 1: elEconomista

The economic outlook for the country continues to send negative signals. In the international environment, several factors have had a downward impact on Mexico's growth expectations at the end of the year. Mainly, those related to the trade agreements between China and the United States, who, despite continuing at the negotiating table, reactivated tariffs on imports.

Added to this is the lack of ratification of the T-MEC and the recent threat by the United States to impose tariffs on Mexico, which works against trade certainty in the region, on the exchange rate, exports and manufacturing.

In the national scenario, we observe that consumer and merchant expectations have not translated into an increase in sales. For example, in the case of ANTAD same-store sales, there is no change. In the case of light vehicle sales, there was an annual drop of 10%. In addition, inflation, which in the fourth month of the year reached 4.41%, has mitigated gains and reduced consumer purchasing power.

On the other hand, the strength of the domestic market has been undermined by lower employment generation. According to IMSS figures, up to the fourth month of the year, just over 299 thousand jobs have been added, 156 thousand less than in the same period of the previous year.

Added to these factors is the downward behavior of manufacturing production. In the accumulated analysis up to April, the sector has advanced 1.5%, practically half the speed it had a year ago. This is aggravated by the fact that the main demander of manufacturing products, i.e., North American industry, has practically stagnated.

The signs of deceleration that are observed lead to consider a reduction of the GDP growth estimate, from last May's 1.65% to 1.60%. This, according to other specialized institutions. Manufacturing production, on the other hand, will advance 2.6%, 20 percentage points less than the previous estimate.

In light of this situation, CAINTRA urges the Mexican government to reactivate its spending to boost the economy and to continue making progress in generating the conditions that encourage competitiveness and, consequently, economic growth.

We agree with a policy of efficiency in public spending, as long as it is carried out without affecting the sectors that have an impact on economic activity and the welfare of the population.

The Chamber continues to approach authorities to generate these conditions. We have had meetings with personnel from SAT, the Presidency, the labor sector, energy, among others, with whom we have received a good opening and soon we will start with work tables.

It is expected that economic activity can be reactivated in the second half of the year.

Prepared by CAINTRA, with information from the Chamber: