November 9-15, 2024
HOT TOPICS:
Future ofAusterity for PEMEX
Mexico's President Claudia Sheinbaum announced a new fiscal regime and austerity plan for Petróleos Mexicanos (Pemex) to improve the company's financial stability The revised fiscal structure consolidates Pemex's tax obligations into a single levy, the "Derecho Petrolero para el Bienestar,“ taxing oil production at 30% and natural gas at 11 63% This simplification allows Pemex to retain a larger share of its income to fund operations, thereby reducing its dependency on government assistance
The austerity measures, outlined by Pemex’s director, Víctor Rodríguez, involve cutting operational expenses and reducing subsidiaries, aiming to save 50 billion pesos. These steps are part of a broader initiative to manage Pemex’s substantial debt, nearly 99 billion dollars, without immediate capital market engagement
Secretary of Energy, Luz Elena González highlighted efforts to stabilize oil production at 1 8 million barrels per day and increase natural gas reserves by 22 7% since 2018 Additionally, she noted significant infrastructure expansions, including the new Olmeca refinery and the Deer Park acquisition, which have boosted refining capabilities
Future legislative proposals will also allow Pemex to pursue mixed projects with private investment, targeting sustainability goals, CO2 reduction, and strategic resource development like lithium, maintaining energy sovereignty The government aims to preserve Pemex's social mission, ensuring a steady energy transition
Source: EL PAÍS
2025 ECONOMIC PACKAGE
The Mexican Economic Package for 2025 which will be presented today to Congress, addresses investor concerns about the high fiscal deficit by proposing a significant reduction, says Finance Minister Rogelio Ramírez de la O Despite the deficit cut, investment in social programs and infrastructure will be preserved Ramírez de la O emphasized a commitment to sound public finances, stability, and dialogue with investors, aiming to align the package with new government priorities
He acknowledged increased public debt now at 49.3% of GDP, up from 43.6% in 2018 driven by investment in previously neglected southern regions Future fiscal consolidation will involve austerity, reducing duplicate government functions, and enhancing efficiency. Austerity extends to Pemex, with proposed cuts and alternative financing methods for the struggling oil giant While recognizing the challenges, the government aims for fiscal prudence, sustained social support, and enhanced revenue collection, especially through stricter tax enforcement
Source: EL FINANCIERO
NEW PUBLIC ADMINISTRATION AGENCIES
José Antonio Peña Merino, has launched the Digital Transformation and Telecommunications Agency to centralize and enhance technological resources across government agencies Unveiled as the nation’s most advanced digitalization initiative, the agency aims to simplify processes, reduce regulatory burdens, and streamline public access to services
Key components include the “Llave MX” digital identity system, which facilitates single sign-on for digital services, and a digital record system to cut down unnecessary paperwork Set for completion in 2026, the initiative will also launch a new satellite to improve nationwide connectivity and establish the National Public Technology Center to manage digital infrastructure and cybersecurity. By unifying tech solutions and promoting transparency, the agency intends to minimize corruption and improve overall governance efficiency
Source: CONTRA RÉPLICA
CNDH's CONTROVERSIAL APPOINTMENT
The Mexican Senate re-elected Rosario Piedra Ibarra as head of the National Human Rights Commission (CNDH) after a lengthy 13-hour session marked by opposition from political adversaries and internal debates among the ruling coalition. Piedra Ibarra, supported by 87 votes from Morena and allies, will serve until 2029. Her reappointment sparked criticism from the opposition and activist groups, who argue that her leadership prioritizes political interests over human rights advocacy
Source: EL ECONOMISTA
Mexico's credit rating shifts downwards HOT TOPICS:
Moody's has shifted Mexico's credit outlook from “stable” to “negative” while maintaining its “Baa2” rating This adjustment reflects concerns over institutional weakening and policy uncertainties that may hinder fiscal and economic performance Moody’s highlighted the public spending rigidity and increased debt load, particularly with this year’s fiscal deficit at 6% of GDP, a deviation from Mexico’s history of low deficits Institutional changes, including constitutional judicial reforms, are perceived as potential threats to economic stability, possibly eroding checks and balances and affecting long-term fiscal resilience
Further compounding the situation, Moody’s cited risks tied to Pemex’s debt, as the oil giant’s financial obligations could increasingly burden the government’s balance sheet without a clear path to long-term debt sustainability Despite this, the current “Baa2” rating was upheld due to Mexico's economic strengths and nearshoring opportunities, which could bolster its financial standing In response, Mexico’s Ministry of Finance emphasized that the shift does not necessarily imply an imminent downgrade The ministry noted that Moody's assessment lacked recent fiscal data from the 2025 budget proposal and argued that Mexico’s debt profile remains resilient and attractive internationally Mexico retains investment-grade ratings across eight agencies, demonstrating confidence in its fiscal management despite current global economic volatility
Source: EL ECONOMISTA
CANADA's COMMENTS ON THE USMCA
Ontario's Prime Minister Doug Ford proposed that Canada and the U S withdraw from the USMCA with Mexico, suggesting a return to a bilateral trade deal like the pre-NAFTA agreement from 1994. Ford criticized Mexico for allegedly allowing Chinese goods, such as cars and auto parts, to enter North American markets, which he argues endangers Canadian and American jobs He suggested Mexico should either align its tariffs with Canada and the U.S. or lose its place in the agreement Canadian Prime Minister Justin Trudeau shared concerns over China’s trade practices but avoided commenting on removing Mexico from the USMCA
Mexican President Claudia Sheinbaum dismissed Ford’s proposal, affirming that the suggestion lacks viability She noted that the U S initially sought a bilateral deal with Mexico during USMCA negotiations, but Mexico advocated for Canada’s inclusion The USMCA is due for review in 2026, with potential renegotiations under recently elected U S President Donald Trump
Source: EL UNIVERSAL
EBRARD's RESPONSE TO POSSIBLE TARIFFS BY TRUMP
Mexican Economy Secretary Marcelo Ebrard responded to U S President Donald Trump’s proposal to impose a 25% tariff on Mexican imports, emphasizing Mexico’s readiness to retaliate with similar tariffs In an interview with journalist Joaquín LópezDóriga, Ebrard underscored the economic interdependence between the U.S. and Mexico, noting that any tariff increase would disrupt industries across North America, especially the automotive sector, and potentially trigger unsustainable inflation in the U.S.
Ebrard stressed that Mexico has sufficient leverage to negotiate with its main trade partners, particularly under the USMCA, which is due for review in 2026 He highlighted the need for Mexico to prepare adaptive strategies in response to global economic changes, particularly regarding the U S He warned that Trump’s tariff strategy could backfire, harming the U S economy as much as Mexico’s
Source: INFOBAE
HOT TOPICS: Legislative and Regulatory Issues:
ENVIRONMENT
Amendment to the Income Tax Law
Presented by: Sen. Claudia Edith Anaya Mota (PRI) and other PRI senators
Purpose: Grants tax credits equivalent to 100% of ISR for expenses and investments in recycling and environmental improvement programs implemented by employers
Status: Turned to Commissions
Reform and Addition to the General Law for the Prevention and Integral Management of Waste
Presented by: Sen Jasmine María Bugarin Rodríguez (Nay - PVEM)
Purpose: Introduces extended producer responsibility, including electronic waste management Mandates producers and distributors to create waste management plans focused on recovery, recycling, and reuse Encourages investment in waste management infrastructure at the federal and municipal levels
Status: Turned to Commissions
Reform to the State Water Law
Presented by: Dip Óscar Daniel Avitia Arellanes (Chih - MORENA)
Purpose: To cap water tariffs, preventing disproportionate increases that exceed inflation rates and ensuring affordable rates for users
Status: Turned to Commissions
POLITICAL
First reading opinion with a draft decree to amend and add Article 21 of the Political Constitution of the United Mexican States in matters of public security
Presented by: Constitutional Points Comittee
Purpose: To grant the Secretariat of Security and Citizen Protection authority over crime investigation, coordination of the National Public Security Strategy, assistance in national security matters, and intergovernmental coordination, while establishing an Executive Secretariat to standardize and oversee public security operations and manage federal security funds
Status: Presented to the plenary of the Senate
HEALTH
Initiative with a draft decree to amend Section VII of Article 77 Bis 37 of the General Health Law
Presented by: Olga Patricia Sosa Ruiz (MORENA)
Purpose: To establish the right to a unique electronic health record, with IMSS-BIENESTAR responsible for registering and certifying all beneficiary health information This record will include all past medical history and may be maintained using electronic or physical formats Data will remain confidential, and unauthorized disclosure is subject to federal penalties.
Status: Presented to the plenary of the Senate
LABOR
Decree bill amending section XV of article 133 of the Federal Labor Law
Presented by: Julieta Andrea Ramírez Padilla (MORENA)
Purpose: Prohibits employers from dismissing or pressuring a worker to resign due to pregnancy This protection covers the pregnancy period and extends up to one year after maternity leave ends
Status: Presented to the plenary of the Senate
Decree bill amending article 123 of the Political Constitution of the United Mexican States
Presented by: Carlos Lomelí Bolaños (MORENA)
Purpose: Prohibits worker pension funds and assets from funding government projects or obligations Establishes the right to transfer accrued social security benefits, including housing funds, across pension systems.
Status: Presented to the plenary of the Senate
