May 21, 2021


1. Mexican economy improves in April

According to the National Institute of Statistics and Geography (INEGI), the Mexican economy could have grown 20.6% in April compared to the same month in 2020, thanks to a boost led by the industrial sector. According to INEGI’s economic activity indicator, it would be the highest such growth registered since 2004. INEGI indicated that secondary activities presented a variation of 34.5% interannually and an increase of 16.4% for tertiary activities.

Moreover, Fitch maintained Mexico’s rating at ‘BBB-’, with a stable outlook. This is due to: 1) Consistent macroeconomic policy framework; 2) Relatively stable and solid external finances; 3) Low debt compared to similar economies; and 4) Greater certainty on trade after USMCA’s passage.

El Economista: Economía mexicana tendría rebote histórico de 20.6% anual en abril.
Expansión: La economía mexicana crece 20.6% a tasa anual.
El Financiero: Una buena para México: Fitch ratifica calificación con perspectiva estable.

2. Judiciary halts reforms to Hydrocarbons Law

Justices Juan Pablo Gómez and Rodrigo de la Peza granted indefinite suspensions to six companies that filed for legal protections against reforms to the Hydrocarbons Law. This measure was granted considering that the reforms could return monopolistic control to Pemex at the expense of the sector and could result in an increase in prices to end consumers.

Likewise, it was determined that the effects of the measure would include “all permit holders in the hydrocarbon, oil and petrochemical markets.”

Energía a Debate: Reciben 6 empresas suspensión contra Ley de Hidrocarburos.
El Financiero: Congelan jueces Ley de Hidrocarburos.

3. U.S. oil companies accuse Mexico of violating trade agreements

U.S. oil service companies filed a claim of more than USD $100 million to the World Bank’s International Center for Settlement of Investment Disputes (ICSID). The lawsuit arises from a conflict that began during the presidencies of Felipe Calderón and Enrique Peña Nieto.

The plaintiffs argue that Mexico is not complying with obligations outlined in NAFTA, and the current USMCA, by violating protection obligations and legal certainty for the capital of foreign companies protected by the treaty, as well as the guarantees of non-discriminatory treatment for all competitors in the market.

Energía a Debate: Piden petroleras de EU 100 millones de dls en arbitraje.
El Heraldo de México: Energéticas de EU, exigen a México 150 mdd por litigios de sexenios anteriores. 

4. Pandemic outcomes: women unemployed at higher rate, poverty increases across 26 states

The INEGI and the National Council for Evaluation (CONEVAL) have published socioeconomic damages caused by the pandemic this year. CONEVAL indicated that the percentage of the Mexican population with an income lower than the value of the basic food basket increased from 35.6% (first quarter of 2020) to 39.4% (2021). The information indicates that 26 of the 32 Mexican states saw poverty increases, highlighting Mexico City (increase of 14.9%), Quintana Roo (10.1%) and Baja California Sur (8.3%).

On another note, INEGI data indicates that women are the most affected sector in labor matters because of the pandemic: during the first quarter of 2021, 1.6 million people left the labor force in Mexico; 84% of this figure are women.

Animal Político: 84% de quienes perdieron su empleo en pandemia fueron mujeres: Inegi.
Milenio: Mexicanos se empobrecieron en 26 de las 32 entidades federativas: Coneval.

5. Projections two weeks before elections

According to a survey conducted by SIMO Consulting, Morena will need to form coalitions with like-minded parties in order to control Congress, otherwise it will no longer have an absolute majority. Projections indicate that Morena would win 230 seats against the 256 it obtained in 2018. PRI would obtain 82 seats; PAN, 70; PVEM, 53; PT, 32; PRD, 14; and MC, 10. This could happen despite the fact that Morena has 44% of effective voting intention, while the PAN, the second-largest party, only has 19% of intention.

At the local level, pollster “Mexico Elige” published the results of the intention to vote for governors: 45.4% for María Eugenia Campos (PAN) in Chihuahua; 45.1% Evelyn Salgado (MORENA) in Guerrero; 38.2% Samuel García (MC) in Nuevo León; 52.7% Mauricio Kuri (PAN) in Queretaro; and 22% Rubén Rocha (MORENA) in Sinaloa.

El País: Morena pierde la mayoría absoluta y necesita de aliados para controlar el Congreso.
Radio Fórmula: A 2 semanas de las elecciones así va la preferencia para gobernador según México Elige.