According to MyRGV.COM, Mr. Antonio O. Garza, counsel for White & Case Mexico City, retired U.S. ambassador to Mexico and Brownsville native, said in a recent analysis of the “Three Amigos” summit between President Joe Biden, Mexican President Andres Manuel Lopez Obrador, and Canadian Prime Minister Justin Trudeau, which Biden hosted on Nov. 18 at the White House, that Mexico’s sagging economy is being caused in part by U.S. consumer price inflation and an increase in interest rates by the Bank of Mexico.
Ironically, the news comes on the heels of the recent reopening of the U.S. land ports-of-entry to “non-essential” travel from Mexico, a move cheered by the Rio Grande Valley’s retail sector, largely forced to do without business from Mexican national shoppers since the U.S. Department of Homeland Security imposed restrictions in March 2020.
Garza wrote in his analysis that the impact of the challenges discussed during the summit was “reverberating throughout the region.” U.S. inflation recently hit a 31-year high, as employers still face labor shortages and supply-chain issues, and the Mexican economy shrank 0.2 percent from the previous quarter, that country’s first contraction since recovery from the pandemic began, he noted. Garza said the peso’s value is expected to continue falling next year.
“There are a number of things at play here, all of which I think we’ll feel in Brownsville and along the border,” he said. “First, the weakening of the currency will have an impact on Mexican’s purchasing power and, in spite of some pent-up demand in the wake of the travel restrictions, Mexico’s economy is sagging and folks are feeling it. I’m guessing you’ll see a slight uptick in economic activity going into the holiday season, and a fall-off shortly thereafter and lasting well into 2022.”
Mexico Daily Post