Successful Agreements with the Private Sector

After several revisions downwards regarding growth expectations for the country by several financial institutions, the Ministry of Finance and Public Credit (SHCP) also acknowledged a downward revision of the country’s growth expectations.

In the general pre-criteria for the economic policy of 2021, SHCP estimated that the Mexican economy will suffer a 2.9 percent economic contraction. Though many analysts perceive this as a positive outlook from authorities regarding the new economic reality, President López Obrador does not agree with the prognosis. When asked about it in one of the press conferences, the President said that he did not agree with the economic authority. “For obvious reasons, there is no economic normality. Everything is altered.”

Regardless whether the President agrees with the economic authority, the efforts the business sector has made to try to reach an agreement regarding an economic plan for businesses has apparently been successful. On Thursday, the president met with the heads of CCE, ABM, the Mexican Business Council and CONCAMIN.

After the meeting, the leaders of the business sector announced that they had reached a series of agreements that would be announced on Sunday. However, Carlos Salazar, President of CCE, announced that one of the agreements is to use Nacional Financiera to provide credits for SMEs to help companies protect jobs. Moreover, he announced that SMEs that currently have credit problems can reach out to commercial banks to find a solution.

Though the private sector acknowledged that in the best case scenario this meeting would have been sufficient to alleviate all concerns from the private sector, Salazar mentioned that they agreed on going “little by little.” Particularly on providing tax relief for businesses, Salazar said that a measure that provided fiscal relief for businesses in April was out of the question. However, he did mention that the authority is evaluating providing these relief measures for May or June. According to Salazar, they will meet again after the Holy Week break to evaluate the strategies that will be implemented in May.

Francisco Cervantes, President of CONCAMIN, said also that while the president has promised not to increase the country’s debt, the current situation merits the use of debt to boost the country’s economic growth. Cervantes also mentioned that they had to wait until May to see how the situation evolved and analyze on a daily basis which sector needs the most support. According to CONCAMIN, 1.17 million companies had to shut down in the beginning of April because they were not considered to be part of the essential activities decreed by the government.