Following AMLO’s agenda complicates investments for Sheinbaum: Guillermo Ortiz

He highlighted that there is a clear erosion of the institutional framework that puts Mexico in a difficult place in the face of the arrival of Donald Trump to the presidency of the United States and with a goal of reducing the fiscal deficit by two percentage points.

The fiscal deficit reached levels not seen in a decade, close to 6%, this generated a cut in public spending for this year, although social spending continues to increase.

“This is a very important point because structurally public finances are no longer sufficient. Social spending represents more than 30% of total government spending.”

President Sheinbaum needs greater participation from private investment in the face of these pressures, but at the same time she scares them away by having complied with AMLO’s reforms.

“On the one hand you have public finances in tension, compromised, and on the other hand, a strong erosion of the institutional framework,” Ortiz mentioned in his presentation at the ITAM 2025 Economic Perspectives Seminar.

The above leads to an increase in country risk and a downgrade in the sovereign rating.

While the president seeks to promote private investments in clean energy, logistics, housing, trains, because the public investment will not be enough, AMLO’s reforms make the cost of investing more expensive for companies.