Mexico - 2023 Political Outlook & Policy Trends

Last Updated: February 13, 2023


Mexico Political Long Term Overview & Outlook

Mexico was ruled by the Partido Revolucionario Institucional (PRI) from 1929 to 2000, moving from a nationalist and interventionist approach to a free-market and economically liberal approach. In 2000, the centre-right Partido Acción Nacional (PAN) won the presidency, representing a shift to democratic pluralism, but a divided legislature and slow progress in structural reforms hampered political effectiveness. Sluggish growth and rising violent crime led to the PRI’s return to power in 2012. However, persistent domestic discontent resulted in a historic election win for the left-wing Andrés Manuel López Obrador in 2018.

The Mexican political system is presidential, bicameral, and federal, consisting of 31 states and a federal entity covering the capital city, Mexico City. Presidential terms are for six years with no possibility of re-election. During the transition to democratic pluralism, political power has shifted from the executive to the legislature and local governments. Reforms in 2013 allowed for the re-election of legislators and mayors, and established a single electoral institute to improve political effectiveness and reduce election irregularities. In 2018, presidential candidates were allowed to run as independents, but their impact was limited. López Obrador has a tendency to put major policy decisions to public consultations outside of legal channels.

Conservative fiscal and monetary policies support macroeconomic stability, but weak non-oil revenue and shallow credit markets limit policymakers’ ability to boost demand. Previous governments implemented structural reforms in 2013 in energy, education, and telecommunications. López Obrador reversed the education reform by eliminating teachers’ evaluations and attempted to undermine the energy reform, but the loss of a congressional supermajority in the June 2021 mid-term elections limited his efforts. Growth is hindered by a lack of internal competition, a deficient education system, institutional flaws fostering corruption, and high crime levels.

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Mexico's Political Landscape Ahead of the 2024 Elections

Mexican President Andrés Manuel López Obrador’s party, Morena, kept its majority in the lower house of congress with the support of a controversial ally in the midterm elections. Though the party failed to win two-thirds of the lower house, which would have allowed López Obrador to roll back reforms, he still retains institutional power in the budget process and congress. Despite criticism for his handling of the economy, security, and the pandemic, López Obrador still enjoys approval ratings around 60% and is supported for programs such as cash payments for seniors and students, and raising the minimum wage. Despite the setback in Mexico City, Morena performed strongly in state-level races and was leading in 10 of the 15 gubernatorial races.

The near-term political focus in Mexico will be on the state elections in Estado de México and Coahuila on June 4th. These elections are expected to be highly competitive and could provide insight into the political momentum ahead of the presidential and legislative elections in 2024. The ruling party, Morena, remains the favorite to win the presidential race, with several potential candidates including Claudia Sheinbaum and Marcelo Ebrard. On the other hand, the opposition is fragmented with no clear front-runner. The opposition candidate will face the challenge of unifying diverse parties, mobilizing voters, and countering Morena’s incumbency advantage.

2021 Mexican legislative election -- Chamber of Deputies
Note: No Left–Right Categorization

Business Environment

Business Environment Overview

Doing Business Score | World Bank 2021
Business Environment Score | EIU 2022

On Free Market & Competition

Gov Expenditure (% of GDP)
Domestic credit to private sector (% of GDP)
Ease of Starting A Business (Best=100)
Ease of Getting Credit (Best=100)
Enforcing Contracts (Best=100)
Insolvency and Debt Resolution (Best=100)

On Foreign Investment

Foreign Direct Investment (Million Dollar | Nominal)
‱ The World | Ten thousandth

On Labour

Unemployment Rate (%)
Minimum Hourly Wage, Nominal $
Avg Manufacturing Hourly Wage, Nominal $
Avg Monthly Salary, Nominal $
Ten Year Wage Growth (%)

On Tax

Time it Takes to Do Taxes (Hours)
Total Tax and Contribution Rate (% of Profit)
Profit Tax (% of Commercial Profits)
Labor Tax & Contribution (% of Commercial Profits)
Other Taxes (% of Commercial Profits)
Personal Income Tax (Highest %)

On Infrastructure

Internet Speed(Mbps)
Cellular Subscription (%)
Internet Penetration (%)
Logistics Score (2018)
Railroad Infrastructure
Air Infrastructure

Foreign Policy

Mostly friends, despite some tension

Mexico’s foreign policy will take a back seat to domestic policy under President López Obrador. The main foreign priority will be to maintain strong ties with the United States due to its impact on Mexico’s economy. The country may welcome US efforts to relocate supply chains, particularly in the manufacturing industry, but the official stance will not likely be accompanied by pro-market policies that could lead to a nearshoring increase. Tensions have arisen between Mexico, the US, and Canada over the nationalistic energy policies of the administration. In July 2022, the US raised concerns under the USMCA, claiming that Mexico’s energy policies were discriminatory and put US companies at a disadvantage. Mexico invited the US to a third round of consultations in December in an attempt to prevent arbitration. The expectation is that Mexico will modify some of its more controversial policies, such as giving preferential regulatory standards to state-owned enterprises, to avoid a long-lasting, economically damaging trade and investment dispute. Security and immigration will continue to be problematic issues between Mexico and the US, but the new Bicentennial Framework is expected to improve bilateral coordination over time.

Human Capital


  • Economic Data: OECD, World Bank, IMF、Government Statistics Bureau
  • Currency Exchange: Based on IMF data in 2023/1
  • GDP Growth Projection: OECD、IMF, OECD, EIU、Government Bureau
  • Unemployment Rate Projection: ILO, UNECE
  • Doing Business Report: World Bank 2020 (It was discontinued in 2021)
  • Trade: UN Comtrade, UNCTD
  • ICT Infrastructure: ITU
  • Taxation: World Bank, Statistics Bureau
  • Minimum Wage: Statistics Bureau
  • Analysis: OOSGA Analytics
  • Demographics by States: INEGI

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