September 13, 2020


1. Biden’s triumph represents a better scenario for Mexico

Joe Biden was elected 46th president of the United States and, according to several specialists, this could lead to a better scenario for Mexico: an improved performance of the Mexican economy is expected through a rebound in GDP, the division, populism, racism, and civility, institutionalism, mutual respect and cooperation will resume.
For its part, the Mexican Ambassador to the United States, Martha Bárcena, spoke about the decision of the Mexican government to wait for the official results to congratulate the winner of the presidential election in the United States of America; noting that the principle of non-intervention is being considered by respecting internal processes of the U.S. political system.

El Financiero: Expertos ven mejor panorama económico para México con Biden
El Universal: Biden pide hablar con AMLO; aún no, responde su gobierno

2. Political alliances take shape in anticipation of 2021 elections

Facing the largest electoral process in for 2021 in Mexico, the leader of the Morena party, Mario Delgado, joined a challenge made by the Senate on an agreement made by the National Electoral Institute (INE) that will make gender parity mandatory for gubernatorial offices in the next elections. 15 states will elect governors, for which the INE proposes that 7 candidates be women.
On the other hand, the presidents of the National Action Party (PAN), the Institutional Revolutionary Party (PRI) and the Party of the Democratic Revolution (PRD) announced their alliance with the organization “Sí por México” to represent their agenda to achieve a majority in the Chamber of Deputies, governorships and mayors. For its part, PAN approved that its state committees can seek coalitions with other parties except for Morena.

El Heraldo de México: PAN avala aliarse con el PRI en elecciones
La Razón: En Morena, PAN y MC rechazan ir con 7 mujeres en gubernaturas

3. Mexican economy decreases, but maintains investment grade

Mexico will drop one place to 16th in the ranking of the world’s largest economies, which includes 193 nations, as the value of the national economy will decrease to approximately USD $1 trillion according to projections from the IMF. Mexico is expected to retain the 16th position for at least another five years, its worst such ranking in the list since 1989.
On the other hand, the rating agency Fitch ratified Mexico’s investment grade at “BBB-,” granting it a stable outlook, thereby reducing the risk of a rating cut in a period of 6 to 18 months. The rating is supported by a consistent macroeconomic policy framework, stable and robust external finances, as well as an expectation of stable debt.

El Universal: México pierde un lugar en el ranking de las economías más grandes del mundo
El Economista: Ratifica Fitch calificación crediticia de México en “BBB-“

4. President presents initiative to regulate outsourcing

Mexican President Andrés Manuel López Obrador, presented an initiative that integrates modifications of the Federal Labor Law, Social Security Law, Infonavit Law, Fiscal Code, ISR Law and VAT Law with which he seeks to avoid the tax fraud and effects on workers’ rights through outsourcing.
The proposal consists of regulating three practices: subcontracting of personnel, specialized services and works, as well as employment agencies. It seeks to prohibit the simulation of labor relations, as well as that the employment agencies are considered as employers and can hire in substitution of who is being benefited by the worker’s services.

Aristegui Noticias: Presentan reforma para poner orden en el outsourcing

5. Uncertainty with federal resources: COVID vaccine and Pemex

In the framework of the discussion of the country’s 2021 expenditure budget, the deputies from the PRI, PAN, PRD and Movimiento Ciudadano parties warned that the resources allocated for the purchase of vaccines count the SARS-Cov- 2 are not found in any item in the health sector, so it is not certain how they will be paid.
On the other hand, Pemex would require government support of up to 1% of annual GDP in the form of tax credits and other measures for the next few years to help finance the negative cash flow that the state-owned productive company has. Pemex placed debt in the market at a rate of 7%, which reflects the low confidence of investors. Experts mention that one way out could be farm-outs and debt reduction, as there will be no increase in production.

El Economista: Pemex, requiere apoyo del gobierno
Excélsior: En el aire, los recursos para vacuna; discusión del Presupuesto 2021