Forcing the Revocación de Mandato and its Implications
Attempting to force the exercise of Revocación de Mandato (Recall of Mandate) and aligning it with midterm elections is a trap for democracy, which would place President Claudia Sheinbaum on the ballot for 2027. This move by the majority legislature serving the federal government demonstrates a blatant disregard for democratic principles, advancing towards an authoritarian model.
The populist approach to recall of mandate has no connection with the economic concerns of most decision-makers. Instead, what worries them is the audacity with which they change laws to create an electoral trick and further undermine democracy. This displays the ease with which they can alter the rules of the game without any opposition.
Legal and Political Uncertainty in Mexico
This situation contributes to the existing legal and political uncertainty in Mexico, which is already marked by a series of setbacks, such as the judicial branch’s appropriation, the elimination of autonomous bodies, and the limitation of Amparo Judgment. These factors add to the opportunity cost for numerous investors.
Economic Prospects and the T-MEC Agreement
While the future of Mexico’s commercial relationship with the United States, particularly the T-MEC (United States-Mexico-Canada Agreement), dominates headlines and distracts attention, it is essential to consider internal factors affecting Mexico’s economic prospects.
Bank of America estimates a 1.0% expansion in Mexico’s Gross Domestic Product (GDP) for 2026. However, if the T-MEC remains similar to the current agreement, the expansion could reach 1.4%.
Insights from Bank of America’s Chief Economist
In an interview with El Economista, Carlos Capistrán, Bank of America’s Chief Economist for Mexico, Canada, and Latin America, provided crucial context regarding such decisions.
Capistrán reminded us that Mexico had growth rates between 2.2% and 2.5% before 2019. He noted that since the cancellation of the Texcoco airport project, Mexico’s growth trajectory has remained clearly below 1%.
The Texcoco airport cancellation was an early sign of the regime’s discretion, which Capistrán believes has contributed to Mexico’s low-growth trajectory. The intention to modify the Revocación de Mandato only confirms this ongoing discretion.
Internal Factors and Their Impact
Forcing this electoral change with such audacity is not just another anecdote; it confirms the institutional weakness that reminds foreign capital of not only the political risks in Washington but also the arbitrariness of domestic policies.
This risk has an opportunity cost, measured by the lost potential for Mexico’s economic growth.
