President Claudia Sheinbaum’s first hundred days have been marked by economic turbulence generated by US President-elect Donald Trump’s provocative tariff threats and concerns about judicial reform that seeks to have judges elected by vote. popular.
One of the elements that reflects the growing uncertainty surrounding the Mexican economy is the end of the “superpeso” phenomenon, as the appreciation of the Mexican currency in recent years was known.
The currency closed 2024 with a depreciation of more than 22% against the dollar.
“It did (the peso) depreciate, among other things it is due to the uncertainty in the United States, and the variations, particularly in the rates of the Fed (Federal Reserve) and we hope that once President Trump takes office we will enter a period of stabilization,” Sheinbaum acknowledged in his first morning conference of the year, on January 2.
The president-elect of the United States, who will take office on January 20, announced that one of his first executive orders will be to impose 25% tariffs on “all products” from Mexico and Canada, until the invasion “stops” of the migrants and drugs, particularly fentanyl.
In this regard, Sheinbaum has avoided confrontation and has opted to highlight the benefits brought to both countries by the USMCA, in force since 2020.
The governor exemplified that among the “main exporters from Mexico to the United States” are the automotive companies General Motors, Stellantis and Ford Motors, which arrived in the country 80 years ago.
“Why impose a tax that puts them at risk? It is not acceptable and would cause inflation and job losses in the United States and Mexico,” he considered about the mutual effects, given that Mexico is the main trading partner of its northern neighbor.
Also read: Sheinbaum turns 100 days old with great popularity but with challenges in security and with Trump
In addition to Trump’s victory, analysts attribute the fall of the peso to internal policies in Mexico after the June 2 election, when Sheinbaum won the presidency and his alliance of parties achieved a majority in Congress that allows him to reform the Constitution without obstacles. .
In particular, the market reacted nervously to the judicial reform that as of June 1, 2025 will allow the popular election of judges, magistrates and the Supreme Court, and to the elimination this December of the autonomous regulators of economic competition, telecommunications and energy .
Sheinbaum faces economic slowdown, according to IMF
Another issue that obscures the economic performance in Mexico, the second largest economy in Latin America after Brazil, is the prospects for a slowdown, a trend that has already been marked since the beginning of the year.
At the end of October, the International Monetary Fund (IMF) warned that Mexico’s economy had slowed down, now forecasting GDP growth of 1.5% in 2024, seven tenths below the 2.2% it calculated in its forecasts for the month of last July, and also reduce, in this case by three tenths, the forecast for 2025, until it stands at 1.3%.
In 2023, Mexico’s economic growth was 3.2%
Added to this is the annual budget proposal for 2025, Sheinbaum’s first, which is committed to a notable adjustment with a reduction in public spending of 1.9% and a fall in the deficit to 3.9% of the gross domestic product (GDP), after reaching almost 6% in 2024, and that could hinder growth.
In November, the rating agency Moody’s changed the outlook on Mexico’s sovereign debt from stable to negative, although it maintained its rating at Baa2.
“The change in perspective is due to our view of a weakening of the institutional and policy-making framework that could undermine fiscal and economic results. The deterioration of debt affordability and greater rigidity in public spending make fiscal consolidation difficult, after the increase in the public deficit this year,” stated the rating agency’s report.
With information from EFE
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