Mexico, the twelfth-largest economy in the world by nominal GDP, is currently facing a state of equilibrium. With no major impending danger or significant growth on the horizon, the upcoming presidential elections scheduled for June 2, 2024 will be a crucial test for the country. According to Oraculus, the leading poll aggregator in Mexico, it is likely that the current ruling party, Morena, will retain power. However, it may face challenges in fully controlling policy decisions as opposition parties are expected to make gains in regional governments and congressional seats. This political scenario could lead to continued tug-of-war in Mexico’s politics and limit both risks and potential opportunities for change.
Mexico’s economy is showing signs of stability with various indicators stabilizing. Inflation has decreased volatility since April 2023, especially core inflation. Deloitte forecasts that Mexico’s annual inflation rate will reach 4.3% by the end of the year, close to the current rate of 4.7%. This rate is expected to remain between 4% to 5% for the next three years. As a result, the Bank of Mexico is unlikely to significantly relax its monetary policy stance. Deloitte predicts a gradual decline in the benchmark interest rate from 11% to 9.75% in 2024 and 7% in 2025, making it one of the highest in Latin America. This move is expected to support strong Mexican peso performance with an exchange rate of 17.60 pesos per dollar by
