On Friday, the contraction of the economy during the third quarter was confirmed, bringing twelve-month accumulated growth in September essentially to zero. According to the timely indicator for October, things remained that way, so estimates for the full year will be revised downward in the coming days, although Banamex has already released its own: instead of expecting 0.4 percent growth, they now forecast 0.2 percent.
The pace of the economy has been declining since mid-2023, when spending on the Maya Train and Dos Bocas refinery reached their peak—figures that were also tampered with to give the illusion of a prosperity that didn’t exist. From then until mid-2024, the government focused on handing out more money to more people to sustain that illusion and win the elections with it. We have already discussed this, and the coup d’état that followed.
What we have not discussed, and which deserves some attention, is what has happened to the economy since the current group came to power. Although López Obrador formally took office in December 2018, in practice they held everything in their hands starting in September, with majorities in both chambers. At the end of October, López canceled the construction of the new airport, and from that moment onward the economy began to slow. Up to the pandemic, the economy’s pace was –1 percent annually. In the last year, from September to September, the economy has contracted –0.6 percent.
Compared with September 2018, when the current group took over, the economy has grown 3.5 percent, an annual average of 0.5 percent. This includes the 4 trillion pesos López spent to secure his 2024 victory: building the Maya Train and Dos Bocas (projects that lose money) and distributing handouts to buy votes. Four trillion pesos is equivalent to 11.5 percent of GDP, meaning that the 3.5 percent growth is actually an 8 percent contraction—roughly –1 percent per year. In fact, public debt has nearly doubled compared to September 2018 (up 88 percent), and most of it has been in pesos. This means the government has sucked up resources that would otherwise have gone to private investment. By doing so, it destroys future growth. That is why the law prohibits taking on debt for current spending—something the group in power has ignored, as they ignore everything else.
Although they had promised that Mexico would grow more than during the “neoliberal” years, they quickly changed their narrative to claim that GDP does not matter. López said what matters is happiness; Sheinbaum says it’s poverty reduction. Neither of those things is possible with the deficient economy they are creating. The illusion of prosperity was false, and the illusion of reduced poverty will be false as well. It is already happening, which is why public anger is growing—an anger not born of any conspiracy.
Everything indicates that we have now entered the final stage. The government has no ability to respond: not in health, not in education, not in security, not in the economy. They cannot even control themselves. Every day, more fires are burning and social discontent grows. They have already opted for confrontation, whether through direct repression of demonstrators, persecution of political opponents, or vilification of critics.
By closing the door to dialogue and attempting to block free elections, the group in power is betting on violence, because they believe they have the upper hand there. We are not in the 1960s or 1970s. The government does not have territorial control. The international environment is adverse. We move forward toward chaos.