The president has not taken measures to control public spending, nor is she concerned about it, just like the head of Finance and Public Credit. It seems that the future occupant of the National Palace prefers not to contradict the policies of the previous administration.
The Secretary of Economy seems to think that the only problem is to counteract U.S. tariffs with Mexican tariffs, which has been a cause of constant celebration for AMLO. Even Sheinbaum has joined in this celebration of the increase in remittances.
Despite the circumstances, the president has shown arrogance, insisting that she inherited solid public finances. This could indicate ignorance or simply a desire to please her political mentor. Additionally, Donald Trump's decisive victory complicates the situation for investors, both domestic and foreign, and for potential buyers of government debt.
Public spending has gone out of control in 2024, creating a budget imbalance that is estimated to end at more than 6% of GDP, the highest level since 1989. Illegal migration has increased during AMLO's term, not only from foreigners seeking to cross the border but also from Mexican citizens.
Despite the situation, Sheinbaum has shown enthusiasm for increasing spending in various areas, from pensions to infrastructure projects. The ratification of Rosario Piedra at the head of the CNDH highlights a new Maximato, which weakens the Judiciary as a counterbalance.
Moody's outlook on the federal government's debt has shifted from stable to negative, reflecting the actions of the first weeks of Claudia Sheinbaum's administration. The combination of trade, migration, and fentanyl further complicates the situation and hints that drastic actions may occur in the near future.
