THE MEXICAN INSTITUTE of Finance Executives (IMEF)) launched a warning overwhelming: If Mexico continues with constitutional reforms proposals, the country could lose its investment grade.
This scenario is not new in Latin America; Countries such as Colombia and Brazil have faced similar consequences and, in some cases, have still not managed to regain their status after a decade.
The institute chaired by José Domingo Figueroa Palacios stressed that Losing investment grade is a scenario that no country wants to experience.
Colombia, for example, experienced a 30% depreciation in its currency after losing its investment grade with one rating agency, and is at risk of losing it with a second.
Brazil, for its part, has been unable to recover its investment grade for ten years and it could take another ten years to do so.
In Mexico, reaching investment grade took more than a decade, from 1990 to 2002.
Losing it would not only set the country back, but would make it doubly difficult to recover, especially with the current levels of public deficit and the possible loss of autonomy of the institutions.
The loss of investment grade would trigger a massive outflow of capital, mainly from funds holding Mexican sovereign debt, resulting in a significant depreciation of the peso.
Furthermore, both domestic and foreign interest rates would rise as the country would be perceived as a greater risk; this would inhibit investment, not only because of the judicial reforms, but also because of other reforms in progress.
The disappearance of autonomous organizations and the threat to Mexico’s permanence in the USMCA could further slow economic growth in the coming months, reaching a point of zero or even negative growth in 2025.
IMEF warns that the disappearance of these organizations would generate distrust among investors, in addition to that already caused by the reform of the Judicial Branch.
Mexico must maintain its autonomous bodies to ensure economic certainty and investor confidence, he said.
CLAUDIA SHEINBAUMthe elected President of Mexico, announced the merger of Mexican Food Security (Segalmex) with Diconsa to create the new entity “Food for Well-Being.” This merger seeks to integrate all Diconsa stores under the name “Tiendas del Bienestar” and will be directed by María Luisa Albores. The initiative aims to strengthen the marketing of products such as coffee, beans, cocoa and honey, linking them to the Sembrando Vida program.
THE United States government has asked Mexico to review labor conditions at the Bader de México plant in León, Guanajuato, through the USMCA’s Rapid Response Labor Mechanism. The request follows allegations of violations of the rights to freedom of association and collective bargaining, including dismissals and harassment of unionized workers. Katherine Tai, the United States trade representative, reaffirmed her country’s commitment to labor rights and collaboration with Mexico to resolve these issues.
NEXT October 9th, the Second Chamber of the Supreme Court of Justice of the Nation The Mexican National Union of Mining, Metallurgical, Steel and Similar Workers will be granted the 55 million dollars from the Scotiabank Inverlat trust F/9645-2, which was irregularly disintegrated by Napoleón Gómez Urrutia. The resolution could put an end to years of legal disputes and establish an important precedent on the distribution of union resources.1 The decision is in the hands of Minister Luis María Aguilar Morales.
Manufacturing employment showed a slight recovery in July, with a monthly increase of 0.1%, according to Inegi. This rebound follows a fall in June and reflects a growth in the number of employees and in production workers and technicians. The wood and metal products industries stand out with significant increases. However, sectors such as furniture manufacturing and the paper industry experienced significant cuts.
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