Investments in Mexico will continue, despite weak rule of law: UBS

“Problems with the rule of law have long been a barrier for companies in Mexico,” UBS highlighted.

For the bank, smaller companies will be vulnerable to the reform of the judiciary because multinationals could resort to international arbitration to resolve disputes.

“Smaller national companies will face greater uncertainty in obtaining judicial protections and rulings as the local system may become more prone to conflicts of interest and political influence,” he noted.

Furthermore, with the change of administration, it is expected that there will be less dynamism in the economy, something typical of the first year of government. “The new officials focus on designing economic policies and regulations, causing a pause in activity,” the report highlighted.

As the new administration’s learning curve occurs, further delays in licensing are expected.

“We notice a depression in business confidence and the need for fiscal consolidation at the same time as a moderating US economy that may impact exports and remittances.”