Mexican President Claudia Sheinbaum is accelerating efforts to forge a “grand national agreement” with the business sector to revive an economy that is showing clear signs of weakness. Despite the “cold” approach of the United States and the Mexico Plan, the country’s gross domestic product (GDP) decreased by 0.3% due to the decline in industrial activity and the decrease in consumption, as well as public and private investments. With these warning signs, the president is urgently seeking a contingency plan with the private sector to revive joint ventures in infrastructure, housing and connectivity. In line with this plan, Sheinbaum met this Monday at the National Palace with the richest man in the country, Mexican tycoon Carlos Slim. For more than two hours, the president and the owner of the telecommunications company América Móvil discussed, behind closed doors, the main obstacles to stimulating investment in the country. After the meeting, which was also attended by the president of the Business Coordinating Council (CCE), Francisco Cervantes, Sheinbaum briefly reported on his social media that the meeting was about “good forecasts” for the economy in 2025 and 2026.
Slim, whose fortune exceeds $115 billion, has visited President Sheinbaum at the National Palace at least three times since taking office. These previous meetings discussed the future of trade between Mexico and the United States, the USMCA, and investment opportunities. After speaking with the Mexican tycoon, Sheinbaum met with two banking leaders, HSBC CEO Michael Roberts and HSBC Mexico CEO Jorge Arce. Roberts later said on social media that they discussed the significant opportunities facing the Latin American country. “We talked about the important opportunities ahead for Mexico: a vibrant economy, excellent connectivity and global integration, and how HSBC can continue to drive Mexico’s growth,” he wrote.
A little more than a year into his term, economic policy has become Sheinbaum’s Achilles’ heel. With no tax reform on the horizon, the 10.1 trillion peso budget approved for next year fell short, forcing the mayor to look for a third way forward in collaboration with the private sector. This plan, according to sources close to the president’s office, will be announced next year. Sheinbaum’s team did the same in strategic cities like Monterrey, where it met with business groups in the construction and housing sectors for the same purpose.
The Mexican government’s far-reaching strategy includes the creation of a Law on Infrastructure Investments for Wellbeing, which the Morena majority in Congress is poised to pass before December 15. Meanwhile, lawmakers and Finance Minister Édgar Amador are finalizing details with business leaders. A closed-door meeting with bankers will be held this Wednesday to outline the terms of the new legislation, which seeks collaboration between government and the private sector to finance infrastructure projects with social objectives that are also profitable. This law would repeat the public-private partnership (PPP) laws passed during the administration of Enrique Peña Nieto.
This legislation will allow the government, through private investment, to tap into investment funds, savings and loans to activate Sheinbaum’s master plan, which aims to fulfill his promise to reach 29% of GDP invested in infrastructure by 2030. Alfonso Ramírez Cuéllar, Morena’s deputy coordinator in the Mexican Congress and a close ally of the president, is behind this initiative. “We want to mobilize millions of dollars in resources, coming from economic assets held in banking institutions such as loans, retirement savings accounts and investment funds,” he explains. The objective is to achieve “a national mobilization to launch an anti-cyclical program that will allow us to achieve one of the most important objectives, that is, to grow the economy, injecting significant capital into the construction sector, housing and the construction of communication and connectivity infrastructures”, he concludes.
Despite the resilience of Mexican exports and the implementation of Plan México, the outlook for the Mexican economy this year remains uncertain. While foreign direct investment peaked at nearly $41 billion in the first nine months of the year, local companies and the public sector have tightened their lending portfolios this year. According to official data, gross fixed capital formation in the country – which includes spending on structures, machinery and equipment – fell 9% in August compared to the same month in 2024, the largest contraction since 2021. Within this category, construction spending contracted by 7% year-on-year, while spending on machinery and equipment fell by more than 10%. With this latest decline, this type of productive investment has extended its downward trend, marking an entire year of negative growth.
The reduction in public and private spending, the stagnation of oil production and the persistent uncertainty over US tariff policy are some of the latent risks that continue to threaten the Mexican economy. In a recent analysis, Grupo Financiero Banamex recognized that, although uncertainty remains high, it has decreased slightly and there is an overall improvement compared to the prevailing mood in the first half of the year, which should allow for a gradual recovery of private investment and employment in Mexico. “The change in the direction of monetary policy, from restrictive to neutral, will also contribute to the gradual recovery of consumption and investments.” In line with these new circumstances, the bank lowered its GDP growth forecast for the country this year from 0.4% to 0.2%.
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