The Mexican Stock Exchange Grows/Challenges With Inflation

AMLO points to Mexican Stock Exchange growth since his administration began. President Andrés Manuel López Obrador highlighted that the Mexican Stock Market has grown 27.7 percent since his government started in 2018. “It is a recovery that has not been seen for a long time. It is quite encouraging because the Mexican Stock Exchange fell with the pandemic but a recovery has already been achieved. We will continue to improve its performance."

At the end of 2021, the stock index of the Mexican market accumulated a growth of 21 percent to 53,175 points, which was the highest annual growth since 2010. According to experts, the rise was due to the country’s economic recovery that favored listed companies. In addition, recently the Mexican Stock Market announced that the International Quotation System  broke the record of listed values with 3,000 registered, which allows a greater variety of investments to reach the country.

Inflation has been higher during López Obrador’s government. López Obrador said that inflation during his government has been higher than during other governments. However, he said that this was due to an increase in prices as a result of the pandemic, an increase that is expected to be temporary. “This is our challenge. In recent months, inflation rose and exceeded the level that Peña (former President Enrique Peña Nieto) had, but it is an external phenomenon. I hope it is temporary because the factors that increased inflation originated with the pandemic.”

In Mexico, year-on-year inflation accelerated in December, reaching its highest level in more than 20 years. Due to rising inflation, experts believe that the Bank of Mexico will raise the benchmark interest rate for the sixth time in February. The consensus forecast is for a rate of 7.51 percent, which would be the highest since January 2001, when it was 8.11 percent.

Intentional homicides one of the government's greatest challenges. López Obrador said that one of the government's biggest concerns is intentional homicides, since its incidence has not decreased as expected. López Obrador stressed that the figure has been contained, meaning it is not rising; however, it has not been significantly reduced. “Intentional homicide is another of our concerns, but we are progressing. This past year, the decrease compared to 2020 was 4.16 and I hope it will be like this for 2022, 2023 and 2024. The important thing here is that the number was rising but we managed to contain this increase. 

In 2021, around 28,160 homicides were reported, which is equivalent to 77.15 deaths per day. The intentional homicide figures are only slightly lower than in 2020, when there were 28,830 homicides, which is equivalent to an average of 78.98 deaths per day. In addition, according to data from the National Public Security System, an increase in intentional homicides was reported in eight states: Zacatecas, Morelos, Nayarit, Sonora, Nuevo Leon, Michoacan, Baja California and San Luis Potosi.

New branches of Banco del Bienestar. López Obrador highlighted Banco del Bienestar’s growth as it is poised to have the most branches in the country. More than 300 branches will be inaugurated in the coming days, bringing the number of branches to 2,700. "I am going to open more than 300 banks in 10 days. I am going to symbolically go to 10 and everyone is invited. What we are looking for is for Banco del Bienestar to become the main integration center for social programs.”

Banco del Bienestar is the main provider of resources for social programs. López Obrador's plan is for the bank to have a presence in highly marginalized localities and facilitate savings among residents of these communities. However, the bank has been accused of wasting money and not providing good service. According to Mexican journalist Loret de Mola, of all the branches, only 270 are working and at the majority, there is no system, ATMs, equipment or personnel. In addition, the National Banking and Securities Commission (CNBV) recently sanctioned Banco del Bienestar for money laundering issues.