Mexico - March 2026

This March edition of the Latin American Report: Mexico begins by looking at the difficult dichotomy that President Claudia Sheinbaum is trying to maintain in offering support to Cuba while also keeping on the good side of Washington. Sheinbaum sees herself in the precarious position of wanting to appease the pro-Cuban base of her ruling Movimiento Regeneración Nacional (Morena) and help Cuba when it needs it most, while maintaining a good relationship with the Trump administration, especially given the upcoming renegotiation of the US-Mexico-Canada Agreement (USMCA). 

The next article looks at the state of Sinaloa, which has been undergoing a sustained wave of violence since September 2024, driven by an internal conflict between rival factions of the Cártel de Sinaloa. While the government continues to blame violence in the state on this feud, recent high-profile incidents have highlighted the multifaceted nature of violence in Sinaloa, pointing to the potential for an escalation in political violence in the run up to gubernatorial and local elections next year, as well as the risks facing multinational companies wishing to profit from the state’s agriculture, mining, and fishing industries.

Drought is the subject of the following piece, with Mexico’s national water commission (Conagua) announcing the lowest levels of drought recorded in the country for six years on 2 February. This article looks at why this is the case.

After, we turn to the killing of Nemesio ‘El Mencho’ Rubén Oseguera Cervantes, the leader of the Cártel Jalisco Nueva Generación (CJNG), during a security operation in February. His death set off a wave of retaliatory cartel attacks that caused much short-term economic damage. However, his death could also lead to a sustained uptick in violence that has a long-term negative impact on Mexico’s economy, as this piece explains.

In the next article we consider Mexico’s economy, which grew by just 0.6% in 2025, representing the country’s fourth consecutive year of weaker growth and its longest slowdown since the 1980s. The disappointingly low annual performance was due to a combination of factors, including low investment, trade volatility, and a gaping budget deficit.

We then examine the decision of the central bank (Banxico) to slam the brakes on a cycle of consecutive interest rate cuts that started one-and-a-half years ago on 5 February. The final piece in this issue concerns progress in the planned sale of Banamex, the Mexican retail bank owned by US multinational bank and financial services corporation Citigroup Inc.