IRIA News

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Claudia Sheinbaum was sworn in on October 1, 2024, as the country’s first female president. During her inauguration ceremony at Mexico’s Congress, the 62-year-old scientist and former mayor of Mexico City pledged to prioritize women’s rights and maintain economic stability, emphasizing her commitment to ensuring Mexico remains an attractive destination for international investment.

In her emotionally charged speech, Sheinbaum expressed the significance of her presidency. “It’s time for transformation, it’s time for women,” she said, her voice filled with emotion. “I’m a mother, a grandmother, a scientist, and a woman of faith, and from today, by the will of the Mexican people, the president.”

The inauguration marks the beginning of her six-year term, during which Sheinbaum is expected to tackle a wide array of challenges, from economic reforms to gender violence and public security.

Addressing economic challenges

In her first address as president, Sheinbaum was quick to reassure the business community’s concerns about Mexico’s economic direction after her predecessor, Andres Manuel Lopez Obrador, passed a controversial judicial reform. This reform, which allows judges to be elected by popular vote, has stirred apprehension among investors, as well as criticism from the U.S. ambassador to Mexico, who expressed concerns about its impact on the rule of law.

Sheinbaum reiterated her commitment to ensuring the central bank remains autonomous to alleviate these concerns. “Rest assured that the investments of national and foreign shareholders will be safe in our country,” she assured investors, signaling a desire to maintain investor confidence in Mexico’s economy.

Sheinbaum has pledged to keep Pemex’s daily oil production at 1.8 million barrels, a figure in line with current output. The future of Pemex is a crucial concern for Mexico’s economy, and how Sheinbaum navigates its financial and operational health will likely influence investor confidence.

However, external factors may add to the volatility. With the upcoming U.S. presidential elections in November, Sheinbaum faces potential economic risks, especially if former U.S. President Donald Trump, who has previously threatened to impose tariffs on Mexican goods, returns to power. This could create further uncertainty for Mexico’s export-dependent economy.

Sheinbaum’s government is expected to unveil its first budget before November 15, a critical moment for her administration. Investors and economists will scrutinize the budget for signs of how she plans to reduce the fiscal deficit, which is expected to close at 5.9% of gross domestic product (GDP) by the end of the year. Her goal is to lower this to 3.5%, a significant reduction.

Mexico’s central bank recently revised its GDP growth forecast downward for this year, lowering it to 1.5% from 2.4%. The bank also reduced its estimate for 2025 to 1.2%. While nearshoring—the practice of moving production closer to main markets—has bolstered foreign investment in Mexico, Sheinbaum must still grapple with how to sustain this momentum amid judicial reforms that have raised concerns among foreign investors.

Social reforms

As the first female president, Sheinbaum has made women’s rights a central focus of her agenda. During an afternoon speech in Mexico City’s historic Zocalo square, she laid out a series of 100 pledges, ranging from expanding public healthcare and education to building 1 million new homes and capping prices for essential goods.

A major element of her platform is a comprehensive package of reforms to combat gender violence and discrimination. Mexico has some of the highest rates of femicide in the world, and Sheinbaum has made it clear that addressing this crisis will be a priority. “Our guide is the happiness and well-being of the people,” she stated, adding that she plans to introduce constitutional changes to enhance protections for women and reduce impunity.

Sheinbaum is expected to unveil this package of reforms on Thursday, signaling her intent to tackle deep-rooted issues of gender inequality and violence.

Sheinbaum’s presidency is seen as a continuation of Lopez Obrador’s policies, with her campaign promising “continuity with change.” Lopez Obrador, who leaves office after a single six-year term, achieved significant milestones during his presidency, including doubling Mexico’s minimum wage, reducing poverty and unemployment, and strengthening the peso.

However, Sheinbaum inherits significant challenges, including the country’s largest budget deficit since the 1980s and slow economic growth. Though experts suggest that Mexico will likely require a tax reform to boost revenues, Sheinbaum has ruled out sweeping tax overhauls for now. Instead, she intends to focus on improving the efficiency of tax collection, particularly at customs.

With the weight of history on her shoulders, Sheinbaum ended her speech with a solemn promise: “I’ll govern for everyone and be assured that I’ll put my knowledge, strength, my history, and my life itself at the service of the people and the country.”