Jump to content
Chapala.com Webboard

Mexican economy in recession


Rony

Recommended Posts

About a year ago, we had the discussion here about the immediate future of the Mexican economy and at that moment a lot of people were still so naive to believe the false upbeat articles from certain press (with hidden agendas), that portrayed Mexico as the new tiger economy.

Again, I ask the pseudo-intellectuals now to come down from their make believe ivory towers and from behind their safe desks and throw themselves in real Mexican life. Today it is official.... Mexico is in recession and IMEF is not optimistic about the future.

Yesterday, there was a similar article in the Financial times and here is another one in today's La Reforma. These kinds of Alice in Wonderland professors make me angry because as I always say.... you can not fix anything if you do not want to see where it is broken..... the tremendous harm that these people do (and unwilling or not capable to see that).

Here is the article : http://www.negociosreforma.com/aplicacioneslibre/preacceso/articulo/default.aspx?id=140927&v=1&pc=102&urlredirect=http://www.negociosreforma.com/aplicaciones/articulo/default.aspx?id=140927&v=4&pc=102&urlredirect=http%3A%2F%2Fwww.negociosreforma.com%2Faplicaciones%2Farticulo%2Fdefault.aspx%3Fid

Rony

Link to post
Share on other sites
  • Replies 67
  • Created
  • Last Reply

Wow someone is righteous.

mmm Mexico's GDP is 1.5%

Definition of recession: A period of general economic decline; typically defined as a decline in GDP for two or more consecutive quarters.

The National Bureau of Economic Research defines an economic recession as: "a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales."[5] Almost universally, academics, economists, policy makers, and businesses defer to the determination by the NBER for the precise dating of a recession's normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales."

In the second quarter of 2013, Canadian GDP grew 0.4 percent quarter-on-quarter, following 0.5 percent growth in the first quarter, mainly due to a drop in investment.

Mexico's GDP may not be great but it is better than Canada's and definitely not in a recession.

US first quarter 1.1%; second quarter 2.5% with an average of 1.8%. Average for first half of year is lower than Mexico's of 2.7 and 1.5% which averages out to 2.1%.

Link to post
Share on other sites

Wow someone is righteous.

mmm Mexico's GDP is 1.5%

Definition of recession: A period of general economic decline; typically defined as a decline in GDP for two or more consecutive quarters.

The National Bureau of Economic Research defines an economic recession as: "a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales."[5] Almost universally, academics, economists, policy makers, and businesses defer to the determination by the NBER for the precise dating of a recession's normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales."

In the second quarter of 2013, Canadian GDP grew 0.4 percent quarter-on-quarter, following 0.5 percent growth in the first quarter, mainly due to a drop in investment.

Mexico's GDP may not be great but it is better than Canada's and definitely not in a recession.

Sorry if I sound righteous, ... just a bit tired of non critical readers or writers with hidden agendas,... and this, over and over again, even if reality proves them completely wrong. All this hurts me even more, daily being confronted with people that are desperate for jobs and simply not being able to put food on the table (through my employm project).

I know the definition of a recession, but it is a little more complicated than that. If you read the article (there is another one in El Informador), : officially, IMEF calls it a recession (and I would say that this kind of organisation has something to say about it), add 4 more thoughts to that :

- GDP went down from forecasted 2.7 % to the actual 1.5 % (this year)..... that is not a minor difference and means something

- Yearly Mexican population growth is 2.2 %..... with 1.5 % of econ. growth, that is a deficit of 0.7 % or 0.7 % less income for the average Mexican (if in your technical terms, not a recession, it will certainly feel like one to many people and isn't that what matters)

- if this bad news comes from the government, it is probably worse in reality

- 1.5 % growth in Mexico is not exactly the same as 1.5 % growth in Canada (already a rich country). In order to really take Mexico out of poverty you need far bigger numbers, so again, it is not a good comparison

Finally, let us not overfocus on figures or a definition here..... the message is what counts and is very clear.,... the economy is far from good and the new fiscal measures are not going to help. Ignore the facts and you leave the door wide open to more destructive measures. And a few islands of economic successes (like Queretaro or Puebla,.... ) will not help the other 95 % Mexicans.

It all means that day to day, more people are struggling.

Therefore, I would plead not to take this discussion to the academic level, with textbook websites. There are mothers and fathers outthere facing an ugly reality.

Rony

Link to post
Share on other sites

Reality... for years, 4 freight trains a day through San Miguel. Now there are 12 minimum and much longer. The freight cars appear to have names of every railroad in Canada and the US. Majority of freight cars are the type that carry new cars headed to the US and Canada. Is it all rosy.. no ... but still higher GDP that rest of North America. And these freight cars do not originate locally!!!!!

Guanajuato and Queretaro states are doing extremely well. Leon, Queretaro, San Juan del Rio, Celaya all experiencing significant growth. And while they represent a small part of Mexico the outlook is bright. Part may be due to the fact they are some of safest areas in Mexico, served by major highways and a railway. Queretaro is becoming the research, education, manufacturing jewel of Mexico and is booming. These cities are not dependent on tourism.

Mexico will lead the growth in North American production with an estimated 18 percent increase through 2018, Wards said, led by lower labor rates, favorable trade agreements with Latin America and easier access to those markets.

"Years ago, there was always questions about the quality that was coming out of Mexico, but now they've got some of the best assembly plants in the world," said Stoddard. "The number of free-trade agreements Mexico has around the world could turn into an advantage."

Currently, Mexico makes more than 2.8 million cars a year. The U.S., thanks to the Big Three, is still the overall leader and is forecast to grow by about 14 percent to 11.6 million cars. Canada is expected to decline by 4 percent, to about 2.3 million. General Motors, Ford and Chrysler together make up about 57 percent of all North American production.

But Japanese automakers are leading the surge. Nissan and Honda are opening two plants in Mexico for the Sentra in 2013 and the Fit in 2014. Mazda -- which is quitting a U.S. joint-venture plant with Ford, which built the Mazda6 -- is opening a new Mexican plant in 2014 to build the Mazda2, the Mazda3 and the next-generation Toyota Yaris. Mazda has made a little more than 1.7 million cars in North America since 1987.

Volkswagen will open a second Mexican plant by 2016 to build the next-generation Audi Q5 and likely the next A4. The automaker's original Puebla plant has been running since 1964, making it the oldest North American plant; it builds the Jetta and Beetle, and had built the original Beetle until 2003.

Clearly not a recession so why say it is ?

Link to post
Share on other sites

Same old... and you said it : " And while they represent a small part of Mexico"

Link to post
Share on other sites

MX is a big country. Looking at one or two parts will just confuse you.

Oil and the price thereof will make a huge difference in MX both as an exporter and as a manufacturer.

The higher the price of oil, the better that MX can compete with China and the far East.

On the other hand, high oil prices will cut into MX tourism both because of the lack of excess money in the US and in travel costs.

My guess is that MX will do better in the next decade than the US

Link to post
Share on other sites

Wow someone is righteous.

mmm Mexico's GDP is 1.5%

Definition of recession: A period of general economic decline; typically defined as a decline in GDP for two or more consecutive quarters.

The National Bureau of Economic Research defines an economic recession as: "a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales."[5] Almost universally, academics, economists, policy makers, and businesses defer to the determination by the NBER for the precise dating of a recession's normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales."

In the second quarter of 2013, Canadian GDP grew 0.4 percent quarter-on-quarter, following 0.5 percent growth in the first quarter, mainly due to a drop in investment.

Mexico's GDP may not be great but it is better than Canada's and definitely not in a recession.

US first quarter 1.1%; second quarter 2.5% with an average of 1.8%. Average for first half of year is lower than Mexico's of 2.7 and 1.5% which averages out to 2.1%.

One of the articles says.............Heath said that economic indicators show that a recession began in the country in 2012, perhaps in mid-year or in November, which is kept up to date.

And another says that academics and economists are not in agreement about if mexico is in a recession

and someone asked who IMEF was

What is IMEF?

The Mexican Institute of Finance Executives AC is an organization dedicated to updating and professional and personal development of its members through the exchange of ideas, experiences and research in the field of finance.

In affiliated IMEF responsible for the financial management of significant and diverse businesses and institutions in both the private and the public sector in Mexico. It is also a leading affiliate group of specialists, Consultants and Researchers of financial areas and correlative.

The IMEF is a solid institution with high prestige and recognition nationally and internationally, stands out as an organization of expert opinion in the national financial sector is a serious organization, dynamic and highly professional for work performed over over 49 years.

This is due to the invaluable contribution made by its partners constantly, by the high standards of ethics and quality have always been respected, opening towards progress, participation in its various activities, technical committees, Research Foundation and contributions to society.

Link to post
Share on other sites

A decline in "forecasted" GDP is not an actual economic decline. Sheesh! BTW, what is the IMEF?

The Mexican Institute of Financial Executives (IMEF) is a founding member of the International Association of Financial Executives Institutes (IAFEI)[1] and takes credit for some serious and renowned variety of print media with both Mexican and international authors. Since 1984, the IMEF has awarded several participants in its research investigation contest and most recently since 2003 in conjunction with Deloitte the Premio Internacional IMEF-Deloitte (copied from Wikipedia).

So, Ajijic,.... maybe their opinion deserves just a little bit of attention, no ?

Unfortunately, all the points that member Ajijic makes have been repeated here over and over again, for a couple of years now. It is basically a debate between common sense people out in the field on the one hand and the bright theories on the other (I am among the less bright) .

In meanwhile, it is very simple .... reality is catching up with us.

This is not only about a figure, this is about life/dead and people.

Like it or not....As long as there is a war going on and the basic necessity of simple safety is a big issue (as we said in other posts today and confirmed in the press,.... 70 % of the whole country is in the hands of the narcos, doesn't that say it all ???),

unions are completely rotten, corruption is incredibly high, education level is below 0, much needed reforms are not implemented, etc.... you can predict that one day there will be elephants swimming in the lake,... it is simply not going to happen (although, it would attrackt a lot of tourists).

Come on, let us be reasonable now..... can someone explain to me how widespread extorsions help improve the economy of a country (did not even mention kidnappings) ???

Why do you keep your eyes closed to the overwhelming amount of ninis outthere (ni trabajo, ni escuela) and the tremendous poverty (also due to the bad economy) and the violence that is linked to it all ? Try looking beyond your own safe haven.

Throw away these subjective and chic international magazines and think for yourself. The last time I read them and followed their advice,.... I lost a lot of money.

On top of it all, you finally have a reputable institute confirming this and you start singing your old songs again... beats me.

By the way, Ajijic, I am certainly not angry with you, quite the opposite, but I would like to hear some original and good arguments and not the old cliches.

Rony

Link to post
Share on other sites

Maybe a better barometer is to ask the (Mexian) man in the street..do you feel better off than last year, or the same, or worst...so your task this weekend is to ask 10 of your Mexican friends ( not only your maid or gardener)and report back!!!

great idea !

Link to post
Share on other sites

great idea !

So you do not think that suggesting at least two populated states are doing well means anything but you want locals at lakeside to ask ten local Mexicans for a broader sample would be a better reflection of the economy?

Maybe look into Aguascalientes, Monterrey and SLP as well as their economies are doing well.

Mexico has the strongest GDP for first 6 months of 2013 in North America. If Mexico is in a recession which it is not then the US and Canada are in a worse recession.

Lakeside is not reflective of Mexico's economy and is likely more depressed than many places in Mexico as it is dependent on weekend tourists and declining number of expats. Plus crime in the area is also a negative. As to Jocotopec it has little to offer except jobs picking berries much of which is seasonal. Again little to do with much of Mexico.

For those who venture a little further check out Guadalajara and check out the non-recession.

It is the safest areas in Mexico that are doing very very well. Lakeside and especially Jocotopec are not those areas.

Link to post
Share on other sites

How do you measure the actual health of an economy when so much of it is underground?

Something else: Drug revenues brought back across the border and money sent from the U.S. to families here by Mexicans there have both dropped drastically. Since drug revenues alone used to exceed foreign earnings from export of manufactured products, I would think this would have a noticeable impact on the Mexican economy.

The U.S. economy is in decline too, they are just lying about it. Saw a report yesterday from the U.S. census bureau that the number of Americans in poverty has jumped 15 percent since the last election. Food stamp usage is at an all time high. The real rate of unemployment in the U.S, when you count all those part timers looking for real jobs and all those people who have stopped looking, is somewhere north of 15 percent.

Since the Mexican and U.S. economies are so intertwined, perhaps it should come as no surprise that one might be dragging down the other.

And Fred, believe it or not, Mexico is bigger than Jocotepec. :)

It would be nice to see this thread continue but it won't if the person comments continue.

Link to post
Share on other sites

.....Always interested in reading articles about the Mexican economy, etc. Don't understand what the point is in getting all stressed out about it or arguing about it. It changes nothing.

If people, ex-pats, appear happy..... don't assume they are indifferent to the suffering.

One wonderful aspect about living here is that are numerous organizations, all ready established, set up to help families in the local community.

It does not matter if you live in Mexico, Spain, Canada or Zimbabwe. If you have money to spare, spend it/donate it/invest it. That is the best way to help. If you don't..... then I guess spending time worrying about the state of the world and arguing about how bad things are is another way to keep yourself occupied.... but it accomplishes nothing.

PS: Have you spent time talking with some of the wealthy Mexicans in the area? Man..... talk about cynical. I have not found a bleeding heart among those I have met. (I know that there are many who are compassionate. I have just not met those ones). Mostly, I hear about the many Vacations they are taking.... how they would give up their home in Guadalajara if it was not that they would have to pay their Maid(s) of 40+ years off. I invite them to a fund raiser and I get an eye roll. They get angry if they see me over tipping or over paying for things. Well, they think I am a fool for paying too much for things. So......... stop picking on the ex-pats all the time. I think most, around this area, are quite aware of the poverty and that is why there are so many non-profit organizations, founded by ex-pats. Peace.

Link to post
Share on other sites

There is almost no culture of charitable giving in Mexico. On another web board, this conversation got me in more hot water than even I am usually in--I wrote an article about it, back then (2003? 2004?) and would share it with anyone who wants to send me an email address via private message--not because I don't want to publish it publicly, but because it is too long to post here.

Link to post
Share on other sites

Even with more people (here) having a hard time making ends meet, I actually thought that Lakeside, even with probably less expats here now, is still doing better than most parts of Mexico.

There was a member here on this webboard, by the name of Tot... (something, a Mexican name), a Mexican/American (living not too far away from Mexico city), who unfortunately banned himself from the webboard (because of a lot of criticism he got). He lived in the real Mexico (unlike Lakeside and unlike the few prosperous states) and I always loved reading his comments because he felt the heartbeat of Mexico far better than any of us ever will. I would have loved to hear his take on all this.

Personally, I have always learnt a lot talking to educated Mexicans, who have nothing to gain in taking certain positions, and who have a larger perspective on the situation.

Economy certainly is a difficult matter to discuss, because as others said here, there is the drug money, there is the informal economy,.... and so much more.

It is up to every reader to decide.

Rony :) (you see,...... not so angry Belgian .... )

Link to post
Share on other sites

There was a member here on this webboard, by the name of Tot... (something, a Mexican name), a Mexican/American (living not too far away from Mexico city), who unfortunately banned himself from the webboard (because of a lot of criticism he got). He lived in the real Mexico (unlike Lakeside and unlike the few prosperous states) and I always loved reading his comments because he felt the heartbeat of Mexico far better than any of us ever will. I would have loved to hear his take on all this.

I remember him,his handle was Toltepeceno and lived in Toluca.When he claimed that they didn't sell pirated DVDs in his barrio's tianguis because the people there couldn't afford DVD players I sort of lost confidence in his opinions,due to the fact that I've been in many homes of poor Mexicans in different states and have not found his observations to be accurate.
Link to post
Share on other sites

I remember him,his handle was Toltepeceno and lived in Toluca.When he claimed that they didn't sell pirated DVDs in his barrio's tianguis because the people there couldn't afford DVD players I sort of lost confidence in his opinions,due to the fact that I've been in many homes of poor Mexicans in different states and have not found his observations to be accurate.

Thanks for reminding me his name. That was the one. I understand why you are saying that but a lot of his other observations made perfect sense to me. One or two possibly wrong observations do not mean that the man did not have interesting experiences to share. He opened up perspectives of the Mexican society and every day life, totally unknown to many of us. He was a bit shocking in his statements and a lot of people did not like that, a kind of no nonsense person, worthwhile listening to, .... after all, he lived completely off the so called beaten track (where most Mexicans live).

Rony

Link to post
Share on other sites

He did but he was also a very angry individual and he took it out on other posters, which is why he got banned. I got the sense that he was either deported from the U.S. or had to leave there for other reasons.

I appreciate that More Liana gives us that perspective on this board without the anger.

Link to post
Share on other sites

Fascinating discussion. I'd guess that Roni has a better handle on the "real" economy than many of us since he deals with those on the lower rungs of the economic ladder.

Here's my take: The concept of service and charitable giving not being obvious among the well off segment of the Mexican population may have to do with an historical perspective. This was, and in many ways, still is, a semi-feudal society and many in the top levels would prefer to keep it that way: low paid help, tiny tips and so on.

Link to post
Share on other sites

There is almost no culture of charitable giving in Mexico. On another web board, this conversation got me in more hot water than even I am usually in--I wrote an article about it, back then (2003? 2004?) and would share it with anyone who wants to send me an email address via private message--not because I don't want to publish it publicly, but because it is too long to post here.

The most of the mexicans do not have enough for themselves, (usually because of the laaaaarge families they have) so they do not have any money left to save or share...:(

Link to post
Share on other sites

But there is a culture of taking care of the extended family...so if we all took care of our own family the issue of giving etc.,becomes less of a issue..If you do not have cash you help in kind.

How many Gringos here with family NOB are just left fend for themselves because their kids have too many problems, but are earning more than their parents did??

Link to post
Share on other sites

Archived

This topic is now archived and is closed to further replies.

Guest
This topic is now closed to further replies.

×
×
  • Create New...