Mexico’s Three Economic Fronts Face a Recession

With limited funds to throw around, the government has had to choose which sector to prioritize.

Mexico is bracing for a serious economic recession this year, much like the rest of the world. But unlike many other countries, the Mexican government is not meeting the event with an abundance of bailouts, tax breaks or other fiscal measures. Instead, Mexican President Andres Manuel Lopez Obrador (popularly known as AMLO) has opted to stay the course with his plans of austerity and social development funding, much to the chagrin of big business. He has made it clear that his goal for combating the recession is to avoid sovereign debt and mitigate the impact felt by the country’s poor. Lopez Obrador is facing three fronts in his battle against a recession in Mexico: the country’s formal, informal and black market economies. And his decision to focus on propping up and reining in the informal economy through continued social development funding is more than just a continuation of adherence to political policy. It also reflects that the government is unable to effectively address the other two economies on its own. The Three Economic Fronts Lopez Obrador’s strategy to confront the economic recession preserves his big-picture plan to “transform” the Mexican economy and wrestles with the fact that the Mexican economy […]

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Allison Fedirka
Allison Fedirka is the director of analysis for Geopolitical Futures. In addition to writing analyses, she helps train new analysts, oversees the intellectual quality of analyst work and helps guide the forecasting process. Prior to joining Geopolitical Futures, Ms. Fedirka worked for Stratfor as a Latin America specialist and subsequently as the Latin America regional director. She lived in South America – primarily Argentina and Brazil – for more than seven years and, in addition to English, fluently speaks Spanish and Portuguese. Ms. Fedirka has a bachelor’s degree in Spanish and international studies from Washington University in St. Louis and a master’s degree in international relations and affairs from the University of Belgrano, Argentina. Her thesis was on Brazil and Angola and south-south cooperation.