Mexico's economic growth will be limited by criminality: IMF
High crime rates can limit Mexico's economic growth, Alejandro Werner, director of the Western Hemisphere Department at the International Monetary Fund (IMF), said yesterday.
Consulted at a press conference on the climate of violence in the city of Culiacan, the scene on Thursday of an attack by organized crime that left eight dead, Werner highlighted the very important economic impact of crime.
As we have indicated on other occasions, these institutional issues, such as the rule of law, the judicial system and, obviously, high crime rates, are important structural issues for the Mexican economy to have a higher growth trajectory, Werner said.
Clearly, from the point of view of the welfare of society, it is crucial and from the human point of view, it is a fundamental concern. And in our area of work (the crime issue) obviously also has a very important economic impact, he added.
In World Economic Outlook, a document published Tuesday in the context of the annual meetings of the International Monetary Fund and the World Bank, the former pointed to an economic slowdown in Mexico with a forecast of gross domestic product (GDP) growth of 0.4 percent for this year and 1.3 percent for 2020, which means a worsening of the forecasts with respect to the previous July report.
The drop in the forecast responds to a slowdown in investment and private consumption as a result of the uncertainty generated by the government of Andres Manuel Lopez Obrador. In 2018 the Mexican economy grew 2 percent.
Last week, IMF staff claimed that improving the effectiveness of law enforcement and judicial institutions is critical to strengthening the rule of law in Mexico, according to the final declaration of the country's annual review under Article IV.