On january 6th the2023 Seminar on Economic Perspectivestook place, in which ITAM reaffirmed their place as one of the main research centers, teaching and economical debate in Mexico. The event took place at Raúl Baillères Hall and it was inaugurated by Meney de la Peza, president of ITAM’s Alumni Association. In addition, had the participation of experts in financial, academic, corporate and public fields.

 

Opening from and economic perspective.

During the opening, the Dean Arturo Fernandez pointed out the opportunities to boost the Mexican economy this year, among which they stand out, satisfying the acute shortage of manpower in the center-north area of the country and the huge investment necessities withing the electrical sector. Likewhise, he stressed that the fundamentals that allow for stability and the possibilities of economic growth in Mexico are maintained, such as the economic market players decentralization, the validity of the USMCA, a responsible conduction of the monetary policy, a successful tax policy and the maintenance of the tax policy, adding a cautious indebtedness, both governmental as in the private sector.

From the perspective of the Dean Arturo Fernández,the economical growth for 2023 in Mexico will be better than expected, and towards 2024 the challenge to keep the public debt under the 50% as a proportion of the GDP will be enourmus. For 2023, he prompted, maintaining an adequate rhythm in rates and inflation decrease will be important. Furthermore, to prevent a decrease in employment in people with a low level of productivity and young people, he highlighted the importance of the suitable adaptations to the labor and wage policy, necessary for employment and collection health.

A landscape, different perspectives

The first discussion panel approached 2023 Mexico’s General Landscape and it was moderated by Miguel Messmacher, Dean of the Division of Economics, Law and Social Sciences at ITAM. Framing the subjects of inflation, growth, monetary policy and the challenges that Nearshoring will represent for the national growth, attended Alonso Cervera of Credit Suisse, Ernesto Revilla of Citigroup and Alejandrina Salcedo, General Director of Economic Research at Banco de México. Their agreements were focused on the fact that inflation is mainly imported, there will be economic slowdown during 2023 and the expected increase in reference rate during the year.

Moving on, the second panel covered the economic perspective from the corporate environment. Nikolaj Lippman from Morgan Stanley, Jorge Suárez-Vélez from Allen & Company y Alejandro Díaz de León, Banco de México former Governor and Corporate Director at Grupo BAL, discussed the economic environment challenges that public and private organizations will be facing during 2023. Elements such as inflation, geopolitics, health, climate change, the increasing polarization and the economic behavior will be the main issues to consider this year, as stated by the speakers. Likewhise, Nearshoring got the discussion panel’s attention again.

Subsequently, the inflation observed by the end of last year was the focus of the third discussion panel. Carlos Capistrán, chief economist for Mexico and Canada at Bank of America, moderated the discussion between Lorenza Martínez of Actinver, Alejandro Werner of Georgetown Americas Institute and Guillermo Ortiz, former Secretary of Treasury and Public Credit and Banco de México former Governor. In particular, they addressed the role the central banks have in combating the inflation pressures and mentioned that Banco de México should stick with conservative monetary policies, with the goal of diminishing the effects of a deficient communication strategy. Guillermo Ortiz warned about a possible remittances and exportation performance slowdown in 2023, due to the economic decelelaration in United Stated.

Lastly, the fourth analysis panel talked about the reconfiguration of global markets integration and its effect in Mexico. Moderated by Beatriz Leycegui, with the participation of Jesús Seade, Mexican ambassador in China, Luis de la Calle founding partner and general director of De la Calle, Madrazo and Mancera firm and Ana María Salazar, national security specialist. Ana María stated that, in 2023, while we glimpsed at an economic recession in United States and Europe, China will grow in a healthy way. In addition, she assured the existence of risks derived from the recent statement given by China about their decision of abandoning Covid prevention policies, the possibility of worsening of a real state sector crisis that could affect the domestic financial sector; as well as a tax adjustment that implies the elimination of subsidies for several sectors. Concerning to the controversies in energy matter, between United States and Canada with Mexico, without giving judgment, it was mentioned that there is a possibility to address them through dialogue, sticking to the obligations about equity expressed in the last chapter of the USMCA, even thought the possibility of arriving to a panel of discussion was not discarded.

 

Economy and climate change

2023 Seminar on Economic Perspectives concluded with a Master Lecture by Doctor Esteban Rossi-Hansberg from the University of Chicago and Doctor John Cochrane from Stanford University about climate change from an economical perspective. Dr. Rossi-Hansberg’s presentation began stating that it will be difficult to stop climate change and therefore, the economu must adapt to minimize costs. The main thesis of his presentation is that the models show the global warming phenomena and how it’s consequences are heterogeneus depending on the region, so there will be “winners and losers”.

In places where the weather is colder and their economies richer, the consequences of a 1°C increase are positive; meanwhile, in places where the weather is hotter and their economies poorer, this increase affects in a negative way, according to them. This will increase the inequality and the incentives towards acting. The analysis leads to the fact that facilitation of migration and commerce will be central for the adaptation. The other factor is to incentive innovation and investment. For his part, Dr. Cochrane focused his exposition in reformulating the main questions about climate change, the real consequences, considering expected growth and development, on one hand, and that it’s not about a threat to the existence of the earth really, on the other.. In conclusion for both presentations, Dr. Rossi-Hansberg summed up, the problem is how to achieve innovation and investment for the technological development without necessarily affecting the economy.

The high level of discussion showed during the Seminar reaffirmed ITAM’s place as one of the most relevant and influential universities in the generation and interchange of economical thought in Mexico, as shown by the participation and assistance of some of the main decision makers both in the public and private sectors.