Report predicts Mexico’s economy, politics will deteriorate in 2023

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HOUSTON – (Jan. 20, 2023) – Elections, a slow-growing economy and conflicts between organized criminal groups are expected to drastically impact Mexico this year, according to a new report from Rice University’s Baker Institute for Public Policy.

“(Mexican President Andrés Manuel) López Obrador will insist on pushing for changes to the constitution, federal laws and government agencies to concentrate power in the executive branch,” according to the Mexico Country Outlook 2023, a collaboration between the fellows and scholars at the institute’s Center for the U.S. and Mexico as well as other contributing experts. “And he will continue to polarize Mexicans and use state agencies to attack critics, intimidate opposition leaders and advance his preferred policies, particularly in the energy sector.”

According to the report, Mexico’s economy is expected to grow between 0.5% and 1.3% this year, which means gross domestic product will not return to 2018 levels until 2024. The financial demands of the president’s pet projects and social programs and the poor economic prospects will further pressure the federal budget.

“This also indicates that Mexico’s goods and services — infrastructure, education, health and general welfare — will continue to deteriorate throughout 2023, with no end in sight unless the major policies of the López Obrador administration are reversed,” according to the report.

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Federal funding for health care will not be enough to compensate for Mexico’s failing health infrastructure, and the fallout will affect millions, according to the report. Low levels of investment in education will continue and, moreover, electoral tensions caused by powerful teachers’ unions will affect the education agenda.

Violent conflicts between organized crime groups will likely escalate as they try to influence politics and get a firmer foothold in licit markets, the report predicts. Organized crime meddling in Mexican elections is not new, but cartels are expected to ramp up their attempts to influence  key votes in the states of Mexico and Coahuila, which will serve as litmus tests for the 2024 presidential election.

“Organized crime is expected to advance its political interests and actively engage in elections in 2023 and 2024, favoring the president, his party MORENA (National Regeneration Movement) and its candidates, as they appear to be the least likely to confront cartel activities, territorial control and increased firepower,” according to the report.

Cartels are also expected to expand their dealings in legitimate ventures as their contact with the licit world — such as through water theft as droughts in the country persist — is predicted to increase, the report said.

As López Obrador pushes to concentrate power in the executive branch in 2023, he will continue to militarize public life at the expense of democracy and human rights, the report predicts. The president will also continue to polarize society politically, stretching the patience of governors and mayors left to deal with major problems and few resources and exacerbating the economic and democratic challenges that will face the next administration.