Mexico’s economy shrank for the first time in years amid tensions with the US, fueling concerns of a recession.
Despite the government’s plan to stimulate growth, investment in the country has flatlined amid high uncertainty internationally and domestically, experts noted: US President Donald Trump has repeatedly threatened steep tariffs on Mexico if it fails to halt drug and migration flows northward, spooking investment at a time when Mexico could be benefitting from American firms nearshoring their operations.
Meanwhile, a recent constitutional reform that gave Mexico’s ruling party control over all three branches of government has fed fears of rising state control over the economy, eroding confidence. “Virtually everything is contracting” due to uncertainty, an expert told Bloomberg.
