The arrival of Sheinbaum to the presidency of Mexico will be positive for investors, according to AXA IM

MADRID (EUROPA PRESS).- The victory of Claudia Sheinbaum, the candidate of Morena (the ruling party of President Andrés Manuel López Obrador), in the presidential elections next Sunday, June 2, will have “positive” implications for investors in the country , according to a report by AXA Investment Managers (IM).

The former head of Government of Mexico City, who has become the main competitor in the electoral race that concludes this week, has, according to polls, the best chance of winning, which would mean continuing the policies of the current López Obrador administration.

This continuity will allow for a “stable” and “attractive” economic environment for bond investors, taking into account, among others, Sheinbaum’s commitment to fiscal discipline and the stability of public debt.

Furthermore, its focus on investing in renewable energy can present significant opportunities in the green energy sector, attracting investors interested in sustainable and environmentally friendly projects.

Sheinbaum maintains a pro-nearshoring stance, emphasizing that investments must be in harmony with the nation’s energy policy, provide high-quality employment opportunities, defend the interests of the local community and adhere to rigorous decarbonization criteria. .

In its plan, sectors such as semiconductors, electronics, electromobility, medical devices and agribusiness are prioritized, with the aim of capitalizing on the distinctive strengths of various regions of Mexico and organizing them into industrial corridors.

All in all, Sheinbaum’s efforts could be hampered by Morena’s occasional nationalist and anti-business rhetoric, along with the party’s failure to address energy sector problems.

In contrast, the more pro-business stance of Xóchitl Gálvez, his main adversary, suggests a potential for stronger nearshoring under his administration.

ENERGY SECTOR, MAIN CHALLENGES

These elections also present an opportunity to address pressing economic issues such as revitalizing the energy sector, strategically leveraging nearshoring opportunities, and the upcoming USMCA review with the United States and Canada.

Mexico needs to take advantage of global geopolitical tensions to increase its attractiveness for nearshoring activities if it wants to boost its relatively low potential GDP growth.

In this context, the next review of the USMCA in 2026 will be crucial, although its outcome remains uncertain, especially if Donald Trump were re-elected as president of the United States.

Furthermore, Mexico also needs to revitalize its aging energy sector to ensure affordable energy supplies to its large industrial sector, making it more attractive for foreign companies to invest in the country.

Years of neglect of infrastructure investment have exacerbated the challenges facing Mexico’s industrial sector, with energy emerging as a critical concern.

A 2023 survey revealed that more than 90% of private industrial parks had problems with reliable electricity, reflecting the repercussions of the heavy dependence on the oil sector, which accounts for approximately 43% of primary energy consumption.