Mexico: Political risks likely to increase - Natixis

The analysis team at Natixis expects the political risks in Mexico to increase in future which are rising already as President Enrique Peña Nieto’s political relevance is low in line with the end of his term.

Key Quotes

“While there is a growing frustration among Mexicans about politics, the main question is whether we will have political change. Corruption scandals, the liberalization of gasoline prices and President Trump’s Mexico-bashing have gave AMLO a wide array of ammunition. The momentum of the leader of Morena has also helped to bolster his party’s candidates at the regional level.”

“But it is important not to overplay political risk. PRI has in our opinion an incumbency advantage over its challengers in June general elections in Estado de Mexico. This structural leeway for many reasons (power, political structure…) is in place since 1925. Even if a surprise is always possible with still 27% of undecided voters, what will really drive up political risk premium is the political cycle in July 2018. The result is slightly more open and complex with Presidential and Congress elections.”

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