Brazil and Mexico face off – at the World Cup and in the region

Brazil and Mexico face off today in the World Cup rematch of their 2012 Olympic finals showdown, when El Tri upset Seleção to win gold.

But more than just a chance for Brazil to redeem itself on its home turf, today’s match in Fortaleza brings together Latin America’s two largest economies at a moment when they’re moving in different directions economically and politically.

“Economic expectations in both countries are exactly the opposite of their outlook at the World Cup,” says Jorge Gonzalez, a Mexico-born economics professor and dean of Occidental College in Los Angeles, who is in Brazil for the soccer tournament. "The Mexican economy is growing, its middle class has been expanding, poverty is going down, and politicians have done what is necessary to enact long overdue structural reforms.

"Brazil on the other hand seems to be going backwards in many ways,” Mr. Gonzalez says.

On the pitch, Brazil’s style of play is marked by speed and creativity in fast-flowing attacks, led by flashy young forward Neymar, complete with his mohawk and major sponsors. Mexico’s more structured and organized approach to soccer is led by the more opportunistic Javier Hernández, known as Chicharito.

Similarly, differences are apparent in how the nations approach government and markets. In the left corner is Brazil with its greater government control and membership in protectionist trade bloc Mercosur. In the right corner is the more market-friendly Mexico, aligned in the liberal Pacific Alliance trade bloc.

Brazil’s persistently high inflation and low consumer confidence have led to an increasingly unstable economy ahead of its presidential election in October. And political instability has been exacerbated by a year of social protests calling for greater investment in public services, which were fueled by frustration over the World Cup’s estimated $11.3 billion price tag. The World Bank forecasts Brazil’s economy to grow a mediocre 1.4 percent this year amid weak demand from key export market China, while Mexico is expected to see 2.8 percent growth amid market-boosting reforms such as opening the energy sector to private investment. 

Brazil overtook Mexico as Latin America’s largest economy in 2005, but Mexico’s steadier growth has put the nation on pace to reclaim the top position. 

“In economic terms, Mexico is certainly better positioned than Brazil for the future, since Mexico has already approved some reforms which will strengthen the economic fundamentals and will put the economy on a higher step in terms of its production capacity,” says Alfredo Coutiño, Latin America director for Moody's Analytics. 

“Meanwhile, Brazil will still have to deal with a political transition after the World Cup, and only after the election results [will] the country have some strength to focus on structural changes.”