Carlos Capistrán's perspective on the economic slowdown in Mexico: analysis and visions for the future

Carlos Capistrán, an economist with vast experience and keen insight, has shared his perspective on the current economic slowdown affecting Mexico. From his position as director of analysis for Latin America and Canada at Bank of America (BofA), Capistrán has stated that this slowdown is temporary and that there are both internal and external factors influencing this situation. Mexico achieved a growth of 3% last year, above the historical average of 2%. However, the economy has shown signs of slowdown since the end of last year, with growth below 2% in the first quarter of this year. Capistrán points out that the strength of the Mexican currency has impacted exports and led to an increase in imports, contributing to this slowdown. Despite this outlook, Capistrán highlights that nearshoring continues to be a relevant trend in Mexico, with foreign companies showing interest in establishing themselves in the country. This suggests that the current slowdown could be temporary and that Mexico remains an attractive destination for foreign investment. Regarding inflation, which remains above 4%, Capistrán acknowledges that it is a challenge for the Bank of Mexico to bring it down to 3%, its established target. Effective communication by the institution is crucial to generate confidence among the population regarding price stability. In relation to the US Federal Reserve, which has hinted at interest rate cuts due to the expected slowdown in that country, Capistrán believes that the Bank of Mexico could also consider rate reductions. However, uncertainty persists due to the need to converge inflation towards the 3% target. Capistrán emphasizes that Mexico has managed to stabilize its inflation and diversify its economy, giving it some resilience against external shocks. However, the main challenge for the country remains increasing productivity, a crucial factor for sustainable and accelerated growth. In this sense, the opportunity of nearshoring could boost productivity in Mexico if appropriate measures are taken. With the arrival of a new government in October, the need to maintain the macroeconomic achievements made so far while also promoting actions that foster growth and productivity is raised. Reducing the fiscal deficit and seizing opportunities like nearshoring are presented as challenges to address in the near future for Mexico. In conclusion, Carlos Capistrán's vision offers a deep and nuanced analysis of Mexico's current economic situation, highlighting both the challenges and opportunities facing the country. The key will lie in the ability of economic authorities to implement effective policies that boost growth and productivity in a globally challenging environment.