*The International Monetary Fund (IMF) has stated that it expects Mexico’s growth to slow to 1.5% this year, down from 3.2% in 2023, “due to binding capacity constraints and a tight monetary policy stance”. In a statement released following the Executive Board’s conclusion of an Article IV Consultation, the IMF forecast growth to slow further to 1.3% in 2025, while it said it expected inflation to converge to the central bank (Banxico)’s 3% target by 2025. According to the IMF, a “comprehensive tax reform” needs to be implemented early in the administration of President Claudia Sheinbaum to “reduce deficits and debt, raise tax revenues, and create fiscal space for investments in human and physical capital”. However, Sheinbaum has discounted plans for a fiscal reform. The IMF also warns about the impact of the recently passed judicial reform, which it says generates “important uncertainties about the effectiveness of contract enforcement and the predictability of the rule of law”, as well as the possibility that it might hinder investment opportunities. Sheinbaum has repeatedly expressed support for the controversial reform, which was the brainchild of her predecessor and political mentor Andrés Manuel López Obrador (2018-2024).
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