The Bank of Mexico has been highlighted for its role as a guarantor of stability during turbulent times, and its conservative monetary policy could mitigate the effects of a more expensive financing environment. The recent measure by the United States to consider Mexican cartels as terrorist groups could have significant consequences on financing conditions in Mexico, in a context where the Bank of Mexico has revised its growth projections for 2025 down to 0.6%.
There is concern that if these groups are designated as terrorists, international financial institutions may harden their stance towards Mexico, leading to increased financing costs. Banks and investment funds could raise interest rates, restrict credit, or withdraw capital, which would negatively impact the development of infrastructure and projects in the country.
Despite the generated uncertainty, some argue that financial markets do not typically react solely to political statements, but rather to concrete data. So far, no significant changes have been observed in investment flows towards Mexico. The United States continues to maintain an important trade relationship with Mexico, which could limit the impact of these measures on the Mexican financial system.
The perception of risk plays a crucial role in financial markets, and if Mexico's image is affected as a complicated destination for investment, the cost of financing could increase without any real structural changes in the Mexican economy. This could jeopardize the viability of large-scale infrastructure projects initiated in previous administrations.
The possible designation of the cartels as terrorist groups would not only have political implications but also tangible economic ones. The increase in financing costs could impact the operation and maintenance of long-term projects at a time when the country faces challenges of slowing growth and reduced public investment.
The combination of lower growth and greater uncertainty represents a risk for Mexico's development, and it is crucial to monitor how financial conditions evolve in the country in the near future.
