Mexico’s economy is not in recession yet but the federal government is trying to counter an economic slowdown with targeted infrastructure spending, Finance Minister Arturo Herrera said on Tuesday.
Herrera said he was worried about a slowdown in the global economy, including in Mexico, and the prospect that the Mexican government could need to do more to prop up economic activity.
“That’s what keeps me awake at night,” Arturo Herrera said at an event hosted by the Wilson Center in Washington.
He noted the Mexican economy was not “yet” in recession.
“A slowdown is worrisome,” he said, adding the government was trying to counter economic weakness by focusing on infrastructure spending, including public transportation projects in the cities of Guadalajara and Ciudad Juarez.
Mexico’s economy is tightly connected to that of the United States which is also slowing, weighed down by global trade conflicts including with China.
Mexican economic activity contracted at the start of the third quarter, after barely escaping a recession in the first half of the year.
Herrera said he was also troubled by the stalled passage in the U.S. Congress of a revamped trade agreement between the United States, Mexico and Canada.
“This is the other thing that keeps me awake,” he said.
While Herrera was in Washington for meetings at the International Monetary Fund, he said some of his team of officials was in the U.S. capital to help explain why U.S. lawmakers should approve the new trade deal, known as the United States-Mexico-Canada Agreement.
The USMCA, which would replace the $1 trillion North American Free Trade Agreement, risks getting bogged down in the 2020 U.S. presidential election race if U.S. lawmakers do not ratify it soon.
Referring to concerns from lawmakers in the Democratic Party that Mexican budget cuts would make it harder for Mexico to implement labor provisions under the new deal, Herrera said the budget cuts would not affect implementation and described the concerns as “a mix-up.”