December 7-13, 2024
HOT TOPICS:
Congress approvesfederalbudgetfor2025
The Mexican Chamber of Deputies has approved the 2025 Federal Expenditure Budget (PEF), the first under President Claudia Sheinbaum The budget totals 9 22 trillion pesos, reflecting a 1 9% decrease from 2024. Despite extensive discussions and over 1,000 reservations presented, none were approved Key reallocations include 44 4 billion pesos, with 17 3 billion directed toward higher education following university demands Significant cuts affected the National Electoral Institute (INE) and the Federal Judiciary Council (CJF). Health expenditure remains unchanged at 918.4 billion pesos, representing an 11% annual reduction, drawing criticism from legislators Of the total budget, 6 4 trillion pesos is allocated for programmatic spending on public services, a 4 1% reduction from the previous year. The remaining 2.7 trillion pesos, for non-programmatic expenditures such as debt servicing, shows a 3 5% increase
The budget aims to reduce the fiscal deficit, targeting a drop in Public Sector Financial Requirements (RFSP) from 5 9% to 3 9% of GDP Finance Secretary Rogelio Ramírez de la O emphasized achieving fiscal balance through a projected 5.4% revenue increase. The expedited approval process, completed in less than a day despite the month of December being available for deliberation, has sparked debate Critics argue that the reductions, particularly in health and key institutions, may hinder public service delivery and democratic functions. Meanwhile, supporters highlight efforts to prioritize education funding and address fiscal challenges through strategic reallocations
Source: EL ECONOMISTA
JUDICIAL POWER GETS BUDGET CUT
The approved budget cut of MXN 13 4 billion to Mexico's National Electoral Institute (INE) raises concerns about its ability to conduct the judicial elections mandated by recent reforms Morena and allies in the Budget Committee propose that INE reduce operational expenses, but no technical justifications for the cuts were provided The INE initially requested MXN 40.5 billion for 2025, including $13.2 billion for the judicial elections, but will receive only $27 billion, significantly limiting resources for organizing these elections
The process, unprecedented in scale, involves 172,000 polling stations and 881 positions, demanding MXN 13 2 billion However, only $5 billion will be available, potentially compromising election quality and voter accessibility Electoral counselors expressed concerns, emphasizing that reduced funding could threaten the technical standards and reliability of elections Discussions continue how to address these challenges before the final approval of the national budget
Source: ANIMAL POLÍTICO
EFFORTS TO END VIOLENCE IN SINALOA
Recent security efforts in Sinaloa have led to significant progress in combating organized crime and violence Authorities arrested Paul Alexander “N” and Karla Alejandra “N” for organized crime linked to drug trafficking and arms smuggling. Surveillance in Culiacán identified their location, enabling law enforcement to execute the arrests. Governor Rubén Rocha Moya commended SSPC head Omar García Harfuch for his role in coordinating security strategies, noting visible improvements since his arrival Rocha highlighted Harfuch’s professionalism, empathy, and efficiency, emphasizing the federal government’s commitment under President Claudia Sheinbaum’s leadership
As Sinaloa faces an ongoing conflict between rival factions of the Sinaloa Cartel, with over 500 homicides reported since September, Harfuch affirmed efforts to reduce impunity and prevent violence President Sheinbaum announced upcoming visits to northwestern states, reinforcing federal-state collaboration to reduce crime rates
Source: GOBIERNO DE MÉXICO
CONSUMER CONFIDENCE FALLS
In November 2024, Mexico's Consumer Confidence Index fell to 47 7 points, marking a monthly drop of 1 8 points, the largest since December 2021, after reaching a record high in October Despite this decline, the index remains slightly above November 2023 levels, and long-term economic expectations for the next 12 months remain positive
Source: EL ECONOMISTA
HOT TOPICS:
MarceloEbrardseeks investmentprojects
During the First Interinstitutional Meeting of Wellbeing Corridors and Economic Sectors, Mexico’s Secretary of Economy, Marcelo Ebrard, urged state governments to strengthen investments to boost regional economic growth He emphasized the importance of leveraging local opportunities, tracking investments, and enhancing economic potential in each region. Ebrard also highlighted the "Hecho en México" label, describing it as a national identity symbol that ensures confidence in exports Discussions at the event focused on investment opportunities and strategies to drive regional and state economic development
Manola Zabalza Aldama, Mexico City’s Secretary of Economic Development, outlined actions to position the capital as a hub for private investment, adapting plans to the unique needs of its 16 boroughs She mentioned initiatives like the recently launched Investment Agency of Mexico City (InCDMX), aimed at attracting investments and fostering production plans. Zabalza emphasized providing investors with security and optimism The event featured key officials, including the Subsecretary of Industry and Commerce, Vidal Llerenas Morales, and representatives from various economic development sectors. They discussed projects to address regional priorities and stimulate growth Future meetings will include economic development secretaries from states like Mexico, Guerrero, Hidalgo, and Morelos, to further expand collaboration and refine economic strategies
Source: GOBIERNO DE MÉXICO
ON POSSIBLE TARIFFS BY TRUMP
Mazda is reevaluating its investment strategy in Mexico due to the uncertainty caused by U S President-elect Donald Trump's threats to impose a 25% tariff on Mexican imports Miguel Barbeyto, Mazda Mexico’s director, emphasized the need for government assurances to protect both current and future investments, warning that without clarity, continuing operations in Mexico might not be viable for the company Mazda has developed an undisclosed "Plan B" to adapt to potential tariffs
Mazda joins automakers like Tesla, Stellantis, and BYD in pausing investments amidst these threats Mexico's Secretary of Economy, Marcelo Ebrard, is engaging with the automotive industry to strengthen the country’s negotiation position and encourage North American component sourcing. Currently, 70% of Mazda's production in Guanajuato is exported to the U S , with the plant aiming for record production in 2024 Trump's proposed tariffs pose significant risks to cross-border supply chains critical to the industry
Source: EL FINANCIERO
THE NEXT AMBASSADOR IN MEXICO
President-elect Donald Trump has nominated retired Colonel Ron Johnson as U.S. Ambassador to Mexico Johnson, previously Ambassador to El Salvador (2019–2021), worked closely with President Nayib Bukele’s administration to reduce violence and illegal migration With extensive experience in the U S Army and CIA, Johnson is task’0¿´ed with addressing critical security challenges, including fentanyl trafficking and border control.
The nomination comes amid Trump’s threats of tariffs on Mexican imports, mass deportations, and potential military action against drug cartels This appointment highlights Trump’s focus on security and migration, which could strain U SMexico relations If confirmed, Johnson will collaborate with Secretary of State nominee Marco Rubio to advance U S safety and security priorities. His expertise may help navigate tensions while influencing the future of bilateral cooperation and regional stability.
Source: REFORMAt
MAZDA GETS COLD FEET
HOT TOPICS: Legislative and Regulatory Issues:
LABOR
Initiative that Adds Various Provisions to the Federal Labor Law
Presented by: Manuel de Jesús Baldenebro Arredondo (MORENA)
Purpose: It defines digital platform workers as those receiving instructions via technology for services like transport, food delivery, and home repairs These workers will have the same rights as others under the Constitution and be connected to social security within 30 days
Status: Approved by the Senate and sent to the Executive for its approval
Initiative to Reform the First Paragraph of Article 87 of the Federal Labor Law
Presented by: Deputy Napoleón Gómez Urrutia (MORENA)
Purpose: To increase the annual Christmas bonus payment for workers in Mexico from 15 to 30 days of salary
Status: Presented to the plenary of the Chamber of Deputies
Initiative to Reform Article 48 of the Federal Labor Law Regarding Compensation Payment
Presented by: Ana Elizabeth Ayala Leyva (MORENA)
Purpose: This initiative establishes that a worker who initially requested reinstatement in their original demand may request a change to constitutional compensation. The request for this change must be submitted before the case resolution is issued
Status: Pending in the Commission for discussion
TRADE
Bill Amending, Article 40 of the Foreign Trade Law
Presented by: Herminia López Santiago
Purpose: Establishes that the imposition of tariffs on imports of merchandise in Mexico must consider the tariffs imposed by the country of origin of said merchandise on Mexican exports
Status: Presented in the plenary of the Chamber of Deputies
FISCAL
Federation Income Law for Fiscal Year 2025
Presented by: United Commissions of Ministry of Finance and Public Credit
Purpose: The initiative aims to allocate and manage federal revenues and debt to sustain government operations and infrastructure projects, ensuring fiscal transparency and efficiency It authorizes specific debt limits for the federal government, Pemex, and CFE to finance domestic and external obligations, including long-term productive infrastructure, while implementing measures to enhance fiscal management and stimulate economic activity
Status: Passed, turned to the Executive
ENVIRONMENTAL
Initiative to reform the Federal Law of Rights
Presented by: United Commissions of Ministry of Finance and Public Credit
Purpose: Updates several concepts and fees for public services and the use of national assets Key changes include higher fees for accessing protected natural areas, exemptions for telecommunication rights used in civil protection during emergencies, and exemptions for Afro-Mexican communities Updates include provisions for mining, water use, migration services, and federal maritime zones.
Status: Published in the Parliamentary Gazzete
Article 10 of the Ley Federal de Responsabilidad Ambiental
Presented by: Sen Gina Gerardina Campuzano González (PAN - Durango)
Purpose: Mandates environmental repair, mitigation, and compensation policies for risks from infrastructure and development projects in ecological zones and protected areas. Focuses on projects impacting mobility, roads, and railways
Status: Published in the Parliamentary Gazzette
Note: This was the last week the Congreess will have session before next year Therefore no new initiatives will be presented next week
