(Bloomberg) -- Mexicans are turning dour on the economy just two months into the nation’s new administration, a poll showed, highlighting a problem that could become much worse if US President-elect Donald Trump enacts trade tariffs.
Roughly 47% of respondents in November said Mexico’s economic situation is bad, up from 44% the month prior, according to a survey conducted by AtlasIntel for Bloomberg News and published Wednesday. Inflation worries are also on the rise, as 44.5% of poll participants said they will make fewer purchases in the next six months, up from 42.9% previously.
President Claudia Sheinbaum is facing a combination of domestic and external risks to Latin America’s second-largest economy. On one hand, Trump has threatened 25% tariffs on all Mexican products if her government doesn’t reduce clandestine migration and fentanyl trafficking into the US, her nation’s top trading partner. Domestic growth is also slowing, with the central bank expecting gross domestic product to expand 1.8% this year and 1.2% in 2025.
Consumer price increases have remained stubbornly above the 3% target despite double-digit borrowing costs. Consumers have gotten limited relief, however, as core inflation—which excludes volatile items—slows to a four-year low.
Sheinbaum is pledging to narrow Mexico’s biggest budget deficit since the 1980s. Roughly 56% of respondents said the administration should cut spending rather than increase taxes, and 63% think the government needs to respect a spending ceiling to avoid future indebtedness, even if it leads to lower social expenditures.
The leader of the ruling Morena party in the Lower House of Congress, Ricardo Monreal, said last month that Mexico needs a profound fiscal reform soon, arguing the wealthy should pay more taxes to help finance a more equal society. But, Sheinbaum has said there’s no need for such an overhaul if tax collection is improved.
Overall, 63.4% of those surveyed approved of Sheinbaum’s government, down from 66.7% in October. About 77.9% of women backed her administration, versus only 43.9% of men.
Corruption is considered to be Mexico’s main problem, followed by inflation and crime, according to the survey.
AtlasIntel surveyed 1,609 people in Mexico between Nov. 21-27. The poll has a confidence level of 95% and a margin of error of plus or minus two percentage points.
--With assistance from Maya Averbuch.
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