Flat growth, rising inflation, and a falling peso: a toxic cocktail for Mexico’s economy that spells trouble for the governing PRI. Enrique Peña Nieto came to power at the end of 2012 promising a series of reforms that would send the Mexican economy into overdrive. But that hasn’t happened. Economic growth has barely kept up with population growth, and the vaunted “energy reform“, which was supposed to lower electricity and gasoline prices, has had the exact opposite effect: Mexican gasoline prices have soared to their highest levels ever: the equivalent of some $4.00 dollars a gallon in a nation where the minimum wage is some $5.00 dollars a day. This has led to the highest inflation in some 16 years while wages remain stagnant (the wage gap between the US and Mexico has actually increased since NAFTA) and corruption remains rampant. Meanwhile, the peso has devalued some 65% against the dollar during the Peña Nieto administration.
In the fourth episode of our MexElects crib sheet series, we break down how the economy is set to play out as an issue in this year’s presidential campaign, and end with a question: who will Mexico’s economic struggles benefit, the PAN/PRD candidate Ricardo Anaya or MORENA’s Andrés Manuel López Obrador?