Discussion Board

Mexico's "Technical Recession"

The Mexican and United States economies have historically grown and declined together. However, in 2019 that has not been the case. Data has been released by Mexico's National Institute of Statistics and Geography shows that Mexico's economy by around .1% for about three straight quarters. It has been called by some economist as a "technical recession"

What is so unusual about Mexico's economic slowdown is that the U.S. economy is rising. The last Mexican economic slowdown that was not accompanied by the United States was the 1990s Tequila Crisis. The so-called Tequila Crisis refers to the collapse in value of the Mexican Peso against the U.S. dollar in 1990s. This was started by the violent uprising in Southern Mexico and the assassination of a presidential candidate in 1994.

This slowdown comes in the wake of rising tensions around the U.S.-Mexico-Canada trade agreement.  President Trump has been pushing Congress to approve the USMCA, which would replace the North American Free Trade Agreement. However, no move has been made by the U.S. or Canada to ratify the deal since Mexico did. 

As the Mexican economy continues to be on a downturn, it remains to be seen if the U.S. economy will follow as concerns for a recession rise. Furthermore, the hopes of the United States or Canada ratifying continue to rise as Trump pushes for Congress to act and hopefully help turn around the Mexican Economy.

 

Source: https://www.cnbc.com/2019/11/26/mexicos-economy-has-not-been-this-weak-since-tequila-crisis.html

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