What is the reality
by Jesús Reyes Heroles*
This article was translated from Spanish by the Mexico Institute. Also in Spanish (see below)
With time, the coverage, quality, and timeliness of economic data published in Mexico has changed. The National Institute of Statistics and Geography (INEGI for its Spanish acronym) does quality work but has paces and delimited periods for technical reasons. Banco de México (the central bank of Mexico) does the same. On the other side, the Ministry of Finance (SHYCP for its acronym in Spanish) has declined in detail and timeliness. In other agencies, the information is published with substantial delays. For example, last Friday INEGI published data regarding “global supply and demand,” which stated that during the second quarter of 2014, GDP increased at an annual rate of 1.6% compared to the 1.9% registered for the first quarter of this year. By itself, this information reaffirmed the idea of an unsatisfactory and sluggish growth for the Mexican economy, just the opposite message spread by various public servants who claim that the same figures are signs of economic recovery. In the same sense, the Mexican Social Security Institute (IMSS for its acronym in Spanish) reported that from January to August 498,000 jobs were created in contrast with the 352,000 created during the same period in 2013; and in August there were in total 17 million jobs, compared to the 16.4 million in the same month last year. This data was also used to convey a positive message. The Ministry of Labor (STPS for its acronym in Spanish) has stressed that the mass wage has increased at a rate no higher than 4% since January 2013.
Furthermore, information regarding perceptions and public opinion is increasingly more rich, diverse, and timely. Multiple pollsters, many related to media, continually produce information about the public perceptions surrounding economic, political, and security issues.
The delay of almost three months between economic information and public opinion surveys results in a mismatch between perception and reality with two main effects: i) it thwarts the adequate economic and political analysis and ii) it creates confusion among the public.
These factors are emphasized by the quantity, opportunity, and effectiveness of communication of different organizations, especially within the Federal Government. The constant bombardment of the “press room” (or Comunicación Social) with positive messages contributes to the phenomenon of deep confusion, which has multiple effects.
An example of this is that, before yesterday, the quarterly analysis of GEA Group (Grupo de Economistas y Asociados, a Mexican Economic think tank) was published, its baseline was a survey taken from September 5 to September 7, just after the Second Presidential Report (II Informe Presidencial) and in the middle of a big media campaign associated with it (you can see the report here: http://structura.com.mx/gea/). The results indicate several things. Firstly, public opinion changed significantly between June and September in a “positive” sense: less people think their economic situation will be worse next year (39% in June versus 32% in September); the reforms will have positive effects (38% vs 33%); President Peña Nieto is doing a better job than they expected (39% vs 31%); public security has improved (24% vs 14%); the reforms have already begun to produce some real benefits and, as a consequence, the general approval for Peña Nieto’s administration jumped from 39% in June to 45% in September. Overall, the index for economic expectations of GEA has improved in all of its components; however it has not been “validated” with hard data. Some of this positive perception regarding the reforms is a product of the effectiveness of government campaigns (both from the Executive and Legislative) which intensified and improved during the period after the Presidential Report.
On the other hand, when an average citizen receives information about the economic situation, reverberated by media, he or she may conclude that the situation is still challenging, which can be confirmed by checking their own pockets. This only intensifies the social confusion.
This situation is not unprecedented or exclusive in Mexico, although the asynchrony between economic data and public opinion is greater there than elsewhere. This generates a complex political phenomenon hard to address, especially when the 2015 midterm elections are about to begin (only 33% of the population knows the month of next year’s election). The prevailing social confusion implies increased responsibility of the government, the analysts, the media, and the political parties and its candidates. It must be avoided because the asynchrony on information opens the window to hold erroneous or biased messages.
* Economist
