Sheinbaum Set to Be Sworn In as First Woman President in Mexican History, Reports Reuters

By Diego Oré

MEXICO CITY – Claudia Sheinbaum is set to make history on Tuesday as Mexico’s first female president, taking office amid significant challenges, including addressing violence from organized crime and managing a substantial budget deficit in Latin America’s second-largest economy.

The 62-year-old scientist and former mayor of Mexico City will be inaugurated in a ceremony at Congress for a six-year term, which will last until 2030.

Political analysts anticipate that Sheinbaum will prioritize stabilizing investor confidence following the passage of a controversial judicial reform pushed by outgoing President Andres Manuel Lopez Obrador.

Investors will be looking for assurances from Sheinbaum regarding a "predictable and investment-friendly policy and regulatory framework," according to Alberto Ramos, head of Goldman Sachs’ Latin American economic research.

"Disciplined budget management and oversight of state-owned enterprises, progress in enhancing public security, and maintaining the integrity of key institutions will be crucial for preserving market sentiment and sovereign debt ratings," Ramos emphasized, pointing out the significance of the state energy company Petroleos Mexicanos (Pemex).

The upcoming presidential elections in the United States, Mexico’s largest trading partner, could further introduce market volatility, especially if former President Donald Trump, who intends to raise tariffs on Mexican products, is victorious.

Sheinbaum’s administration is expected to present its initial budget before November 15, which will undergo intense scrutiny for signs of whether she will fulfill her commitment to reduce the fiscal deficit from 5.9% of gross domestic product to 3.5%.

CONTINUITY WITH CHANGE?

Lopez Obrador, who began his term in 2018, succeeded in doubling Mexico’s minimum wage, reducing poverty and unemployment rates, expanding social programs, and strengthening the peso. These accomplishments boosted his popularity and facilitated Sheinbaum’s landslide victory in June’s elections.

However, Sheinbaum, who has pledged "continuity with change," will take over an administration facing the largest budget deficit since the 1980s and sluggish economic growth.

Economists suggest that Mexico’s economy will need tax reforms to boost revenues, although Sheinbaum has publicly stated that she does not intend to pursue a sweeping tax overhaul. Instead, she plans to enhance tax collection efficiency at customs.

"Sheinbaum will need to enact significant fiscal consolidation if she hopes to maintain the favorable outlook that markets currently hold," remarked Bernardo Keiserman, an economist at investment bank Bradesco BBI.

"We believe the government is focused on an adjustment, but implementing one substantial enough will be challenging, as the economy is currently weak and likely to weaken further," Keiserman added.

Recently, the central bank revised its GDP growth forecast for this year down to 1.5%, from 2.4%, and reduced its 2025 estimate to 1.2%.

The incoming administration will also need to manage the financial burdens associated with Pemex, one of the world’s most indebted oil companies.

While nearshoring—the practice of relocating production closer to primary markets—has facilitated Mexico in attracting investment, Sheinbaum will confront the task of boosting foreign direct investment alongside the implementation of the contentious judicial reform enacted in the waning days of Lopez Obrador’s presidency. This reform, which allows for judges to be chosen by popular vote, has raised concerns among investors and drawn criticism from the U.S. ambassador to Mexico for potentially undermining the rule of law.