Mexico Election

Synopsis:

• Election Overview and Political Climate: Mexico’s largest-ever election on June 2 includes presidential, legislative, and local positions. Claudia Sheinbaum of AMLO’s Morena Party leads in polls despite declining sentiment due to a water crisis, competing against Xochitl Galvez from a coalition of traditional parties.
• Violence and Crime: The election is marked by violence with over 30 candidates assassinated since September and more than 550 violent incidents reported. Drug cartels control significant parts of the country, with violence costing Mexico an estimated USD 254 billion last year.
• Economic Challenges: The economy is slowing, with fiscal deficits soaring due to AMLO’s spending programs. The central bank’s high interest rates aim to control inflation, but high rates and a strong peso impact exports negatively.
• Pemex and Fiscal Concerns: State oil company Pemex’s massive debt is a significant concern. Leading candidates propose different strategies to manage Pemex’s financial burdens, crucial for Mexico’s fiscal stability and investment-grade rating.
• Foreign Relations and Investments: Despite domestic challenges, foreign direct investment remains stable, bolstered by nearshoring trends. Mexico’s economic ties to the US are strong, though future trade uncertainties loom with the upcoming US election.