Christine Lagarde congratulates AMLO for seeking inclusive growth

Christine Lagarde

, the managing director of the International Monetary Fund (IMF) congratulated Mexican President Andrés Manuel López Obrador on Wednesday for seeking to foster a more inclusive economic growth in Latin America’s second largest economy.

Though Mexico is one of two Latin American countries that are part of the Organization for the Economic Co-operation and Development (OECD) , known as “the club of the wealthy,” poverty still affects around 53 million of its citizens (43% of the country’s total population).

The IMF last month lowered Mexico’s economic growth outlook, citing shifts in perception about policy under López Obrador’s new leftist administration, which took office in December.

For 2019, the IMF lowered its estimate for Gross Domestic Product (GDP) growth in Mexico to 1.6% from 2.1%. For 2020, it lowered the outlook to 1.9% from 2.2%.

In November, the IMF reaffirmed Mexico’s access to an emergency credit line, even as it trimmed the amount by $12 billion to $74 billion, saying the incoming government had promised to stick to prudent economic policies.

Shortly after the meeting, the French lawyer and politician, who has run the IMF since 2011, attended a formal sitting at the Mexican Senate, where she praised López Obrador’s commitment to reducing poverty and inequality in a country whose growth has been limited by crime and corruption.

“The country has not met the expected growth that would allow for it to substantially reduce poverty and inequality levels; in the past decades, Mexico’s growth has been disappointing, mainly due to corruption and crime. Facing these two main issues should be a top priority for public policies,” she warned.

The politician listed some of the main obstacles for Mexico’s development, including informality in the job market, limited competitiveness in some sectors, and insufficient access to financial services and telecommunications, though she stressed that deeply-rooted poverty should be addressed without delay.

“The President has made it clear that he is determined to increase economic growth in Mexico and reduce the wealth gap; he has also committed to broaden financial inclusion by fostering a more widespread use of mobile banking,” she mentioned.

Lagarde recognized that Mexico had an outstanding record in the implementation of prudent fiscal policies and had a Central Bank known for its independence and success in keeping inflation low.

U.S. downturn and public spending: Mexico’s main challenges for 2019

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