December 1, 2019 / 6:38 PM / 2 months ago

Mexican president voices regret on growth, but says economy fairer

MEXICO CITY (Reuters) - Mexico’s president conceded on Sunday that economic growth has fallen short of his expectations, but said that wealth is now more fairly distributed as he celebrated a year in office riding high in opinion polls, in defiance of mounting problems.

Mexican President Andres Manuel Lopez Obrador speaks during the anniversary of his first year in office at the Zocalo Square in Mexico City, Mexico, December 1, 2019. REUTERS/Edgard Garrido

A year ago, veteran leftist Andres Manuel Lopez Obrador assumed the presidency pledging to raise economic growth to 4% per year. Instead, the economy has stagnated and slipped into a mild recession during the first half of the year.

“There still hasn’t been growth as we would like, but the distribution of wealth has improved,” Lopez Obrador told a crowd of tens of thousands of supporters in central Mexico City’s Zocalo square on the first anniversary of his inauguration.

“The budget doesn’t end up in a few hands the way it used to, it now reaches the majority of the population,” he added.

Slowdowns in the first year of a new government are not uncommon in Mexico, which has had to contend with the threat of economic disruption by U.S. President Donald Trump.

Lopez Obrador is also battling record levels of violence, which has caused more friction with the Trump administration. But he remains popular, polls show.

Although some surveys show support for him has fallen, one published by newspaper El Financiero this week showed his approval rating was 68%, slightly up on October.

Facing the media every weekday at 7 a.m., the 66-year-old has dominated the agenda for the past year, and his popularity stands in stark contrast with many counterparts in Latin America, where political turmoil has been growing.

Chile, Bolivia, Colombia and Ecuador have all been roiled by civil unrest in recent weeks, while support for the government of Brazilian President Jair Bolsonaro, who took office a month after Lopez Obrador, has fallen away sharply.

Lopez Obrador has used his morning news conferences to keep up a steady barrage of fire against his political foes, who have struggled to mount a coherent opposition to him.

Nevertheless, political analysts and adversaries say the president will come under increasing pressure if he cannot get a grip on security and energize the economy soon.

“The wallets of the people will be his undoing,” said Ernesto Ruffo, an opposition congressman from the center-right National Action Party, or PAN.

Foreign investment to Mexico has held up, but domestic investors have been rattled by decisions made by Lopez Obrador, including his abrupt cancellation of a $13 billion new Mexico City airport a few weeks before he took office.

Lopez Obrador said the project was unsound and tainted by corruption, arguing that so-called “neo-liberal” policies have deepened inequality and fuelled gang violence in Mexico.

He has put welfare programs at the centre of his economic policy, cutting out intermediaries in the distribution process that he said were siphoning off money intended for the poor.

Still, trade and investment have been undermined by ongoing uncertainty over the future of North American commerce.

Latin America’s No. 2 economy depends heavily on access to the U.S. marketplace to fuel growth, and the government is eager for American and Canadian lawmakers to approve a new trade deal known as the United States-Mexico-Canada Agreement (USMCA).

Mexico approved the USMCA earlier this year and Lopez Obrador has urged the U.S. Congress to follow suit.

During his speech, the president said that he was confident the trade deal would be approved very soon.

Reporting by Dave Graham; Editing by Lisa Shumaker and Alistair Bell

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