March 25th, 2022
1. 85th National Banking Convention’s new challenges
The Mexican Banking Association (ABM, by its Spanish acronym) held its 85th convention, in-person, in Acapulco, Guerrero. The event highlights the alternatives for the industry, through development banking, digitalization, and sustainable schemes. President Andrés Manuel López Obrador discussed the increase in investment in the country, the favorable governance situation, economic stability, the sale of Banamex, as well as the cost of commissions charged by savings entities.
Among the main themes of the meeting there will be the principles for the empowerment of women by the United Nations and the Global Alliance for Care of the National Institute of Women (Inmujeres). In Mexico there are 51 banks, which face new challenges regarding their levels of solvency and fundraising, as well as support for infrastructure projects, to enhance banking capacity.
2. Drought in Mexico sets risks for the agricultural sector
The National Water Commission (Conagua) reported that, in the last weeks of March, 30.4% of the national territory suffered from moderate to exceptional drought situations. The most affected has been the agricultural industry, which has triggered a rise in prices and the system. Specifically, Baja California, Durango, and Jalisco are the most affected entities.
The number of municipalities affected by the drought reached 531, which is 21.6% of the total, above the 385 or 15% of those registered in the Conagua Drought Monitor during February. It should be noted that the figures recorded by Conagua are less alarming than those published in March 2021, when 65.1% of the country suffered from a drought that affected more than 1,100 municipalities.
El Financiero: Día Mundial del Agua: 531 municipios de México enfrentan sequía.
3. Economy improves during the first quarter of the year
According to the Timely Indicator of Economic Activity (IOAE, by its Spanish acronym) published by the National Institute of Statistics and Geography (Inegi), February anticipates a monthly increase of 0.3% in the Global Indicator of Economic Activity (IGAE), which would mean four months of growth, and pointed to a better-than-expected performance since January, with 0.5%.
Secondary activities decreased 0.2% in the second month of the year, after a monthly growth of 0.5% in January, which implies their first drop since September 2021. Tertiary activities advanced 0.6%, after a contraction of 0.18% in the previous month. In this context, the risk of the economy registering a contraction in the first quarter of the year would be discarded.
El Financiero: Economía apunta a mejor desempeño al inicio de año.
4. The automotive industry in check by Mobility Law
The mobility sector in Mexico is one of the least regulated in the region, both in official standards and in comprehensive road safety schemes. In this sense, the General Law of Mobility and Road Safety was postponed in its discussion in the Chamber of Deputies under the argument of an inadequate ruling, despite having been unanimously endorsed on March 10, in the Mobility Commission.
The law is presented as a tool that would allow the different levels of government to prioritize the modes of transportation of people, goods, and merchandise, based on a lower environmental cost, with non-polluting vehicles and intermodality. However, pressure from automakers caused congressmen and senators who support the bill to contact the Ministry of Economy to review the content of the bill again.
5. Mexico strengthens ties with commercial allies
The Minister of Foreign Affairs, Marcelo Ebrard, carried out a working tour of Saudi Arabia, Qatar, the United Arab Emirates, and India, with the aim of promoting joint projects to strengthen the resilience of the national health system, attracting investments, addressing rising prices in the energy sector, as well as generate cooperation channels to prevent a possible food security crisis in the face of the crisis in Ukraine.
Likewise, the Undersecretary of Foreign Trade, Luz María de la Mora, and the United States Deputy Trade Representative, Jayme White, held a meeting in Washington D.C. to evaluate the progress of the USMCA. Topics on the agenda covered the safeguarding policy on solar panels imported from the U.S., the regional agribusiness sector, and the blocking of biotech agricultural products by Mexican authorities.