New Mexico economists, policy makers and students gathered at the Las Cruces Convention Center for the annual New Mexico State University economic outlook conference.
Despite the economic forecasts, fears and concerns of economists and commentators, the election of Donald Trump has been good for markets. According to Wells Fargo data- consumer and small business confidence has skyrocketed.
Wells Fargo Economist Eugenio Alemán said the confidence comes with expectations of lower taxes and fewer regulations under the new administration.
“The election has produced a very, very impressive change in expectations about the future, which could be positive if it is translated in more consumption more investments.” Alemán said
But long term, those regulation and tax cuts are projected to grow the fiscal deficit.
“We are expecting the deficit to almost double in the next two years.” Alemán said
What about the outlook for New Mexico?
Oil commodity prices and revenues are up from last year and state poverty rates went down slightly. But the state is still struggling to recover from the recession, employment growth lags surrounding states and out migration rates are still high.
Alemán said the looming concern is the future of international trade under the Trump administration.
“We are still very in the early stages of the new administration and it is very difficult to know what those policies are going to be or what would be the consequences of those policies. There is very little information on what is coming down the pipeline. Not only for the Mexican economy but also for the US economy.”
Alemán said he is concerned about Trump’s proposal to withdraw the US from NAFTA-The North American Free Trade Agreement and impose trade tariffs on Mexicans imports.
“You can get engaged in what is called tit for tat. You do something to me, I do something to you and nobody wins.”
Alemán said despite the Trump administration’s rhetoric, US-Mexico trade relations are extremely beneficial to the US economy and consumers.
According to the US Department of Commerce, New Mexico’s exports to Mexico almost doubled exports over the course of just 2 years.
The lion’s share of those exports originating from Dona Ana County.