EconomyForeign trade and USMCAPoliticsEnergy, technology and environment
Weekly Report — 16 October 2026
BBB
HR Ratings' new grade for Mexico's long-term debt, down from BBB+
4.6% of GDP
RFSP deficit expected for 2026, above the Treasury's 4.1% and the fifth year above 4%
+3.6%
Annual growth of industry in August, the largest increase in 34 months
Economy
HR Ratings downgraded Mexico's long-term debt, from BBB+ to BBB with a stable outlook. The main reasons are a deterioration of the fiscal balance, low GDP growth, and pressures on public debt. It warned that the fiscal imbalances will continue in the foreseeable future, on account of public expenditure's rigidity and constant increases of spending over revenue. RFSP, the widest measure of deficit, is estimated to close 2026 at 4.6% of GDP, higher than the Treasury's projected 4.1%, accumulating five consecutive years above 4%.
The IMF increased its 2026 GDP estimate, from 1.2% to 1.5%, thanks to the surprising increase in exports, particularly computing equipment for AI. It also reduced its estimate for 2027, from 1.9% to 1.8%.
In August, industry had its largest annual increase in 34 months, of 3.6%, and its fifth consecutive month of growth. From January to August, however, industrial growth was only 0.8%, with a 3.5% increase in construction and a decrease of 0.3% in manufacturing. This makes clear that the spectacular increase in exports, particularly computing equipment for AI, contains very little domestic value added, much more like the maquila schemes of the past.
According to México Evalúa, a think-tank, refining oil domestically has been a huge mistake: by refining, instead of exporting crude oil, Mexico has let go around US$ 41 billion. That's two times PEMEX's debt to contractors and suppliers, which stood at US$ 21.42 billion at the end of the second quarter. For 2026 and 2027, ME estimates this opportunity cost will be US$ 7.85 billion and US$ 7.42 billion, respectively.
After a slump in June (-0.5%) and July (0%), private consumption picked up speed at monthly rates, with an increase of 0.4% in August, only to fall again, by 0.1%, in September. Analysts point out the curious phenomenon of the negative impact of the World Cup on consumption.
In September, in urban areas, every Mexican needed MXN$ 4,951.66 just to acquire the basic goods and services basket. At annual rate, it is a 4.4% increase, higher than general inflation, which was 3.5%. In rural areas, the amount is MXN$ 3,553.70, also 4.4% higher.
Foreign trade and relations, US–Mexico and USMCA
Mexico decided to suspend, for five years, its 10% tariff on auto parts for duly registered importers, with the aim of attracting more assembly lines and easing costs for producers in Mexico.
Politics and social issues
After being denied time and again by both AMLO and Sheinbaum, the health sector crisis seems finally to be exploding. The trade union of IMSS, the social security agency, rejected a 2.6% wage increase (to teachers, who routinely extort the government while electorally supporting it, it is 10%) and, with the support of other health institutions' workers, took to the streets in massive protests concerning not only wages, but above all working conditions: a scarcity of medicine, equipment, basic inputs (such as sheets, syringes, bandages, etc.) and even hygiene products, which in several cases have caused deaths, including in neonatal areas. While recognizing some deficiencies, the president wastes time debating the exact number of participants in demonstrations and insisting that it is all a political conspiracy. IMSS's director is on the brink after a series of scandals and evidence of mismanagement. Among the protesters' main demands is the expulsion of their trade union's leader, who is a MORENA substitute federal deputy.
Another crisis, this one related to dirty water, has exploded in Jalisco state. Also, after years of protests against dirty, polluted, and pestiferous water coming out of taps, people took to the streets. The MC government's reaction was even worse, with people arrested and possibly tortured. President Sheinbaum has demanded a full investigation and punishment of policemen and politicians of the state.
Congress approved a new law concerning land property registration and fiscal valuation ("catastro y registro público de la propiedad"). It will homologate, update, and interconnect the local public property registers, with the stated objectives of safeguarding private property, improving geographic information management, and dynamizing real estate markets. Critics fear it will severely increase property tax payments (not by increasing the tax, but the base value calculation), affect the municipal autonomy granted by the Constitution on this matter, concentrate and control private and municipal data by the federal government, and cause mistakes in information migration.
Technology, environment, health, industries and services
American Airlines announced it will reduce flights to and from Tulum's airport. This is the latest blow to a tourist destination which had seemed to bloom with its new airport and hotels but has now collapsed. The main reasons are the elimination of common incentives to airlines, decided by the airport's military administration, as well as mismanagement of the site as a tourism business, exorbitant prices, beaches plagued with sargasso, crime and other disincentives.
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