EXECUTIVE SUMMARY
This report analyzes the ten key risks that could impact the business environment and democratic governance in Mexico in 2025. The analysis is based on Integralia’s methodology, which evaluates each risk’s potential impact and likelihood using quantitative and qualitative indicators. Each risk has a distinct probability of occurrence, which may shift throughout the year.
Most of the risk scenarios are linked to the growing concentration and centralization of power within the federal Executive Branch, as well as the erosion of the system of checks and balances.
2025 is expected to bring heightened political risk, as the lack of effective oversight and accountability mechanisms for government authorities could encourage opacity and arbitrary decision-making.
It is worth noting that President Sheinbaum enjoys high approval ratings, and there is considerable optimism among Mexicans regarding the country’s direction. In this context, the government is likely to prioritize policies that sustain its popularity at the expense of initiatives aimed at fostering long-term economic growth and social development.
In the short term, this undermines the Mexican state’s capacity to capitalize on nearshoring opportunities. In the medium to long term, it erodes the competitiveness of the national economy and its productive potential.
Nine of the ten political risks identified by Integralia in January 2024 materialized. For instance, Morena’s electoral victory that allowed it to approve a constitutional amendment enabling the election of Supreme Court justices by popular vote. Additionally, that Donald Trump’s victory in the U.S. would place Mexico in a vulnerable position.
Throughout the year, Integralia closely collaborates with its clients to monitor each risk scenario, aiming to jointly develop targeted mitigation strategies while identifying and leveraging growth opportunities. For 2025, Integralia has identified the following ten risk scenarios as having the greatest potential impact on the business environment.
TEN POLITICAL RISKS FOR 2025
- Economic uncertainty, trade disruptions, diplomatic tensions, and an intensification of the migration crisis emerge as immediate consequences for Mexico of Donald Trump’s return to the White House.
Impact Level: Very high
Likelihood: Very high
- A deepening concentration of power undermines certainty for the private sector and the overall business climate, driven by a lack of political balance, the erosion of institutional checks and balances, and the opposition’s weakness.
Impact Level: Very high
Likelihood: High
- The spirit of North American economic integration weakens, raising doubts about the viability of the current USMCA framework.
Impact Level: Very high Likelihood: Medium - Companies face increasing legal vulnerability due to the flawed implementation of the judicial reform and the growing bias and incapacity of judicial authorities to solve legal disputes.
Impact Level: Very high
Likelihood: Medium
- The current climate of economic uncertainty persists due to the approval of new reforms pushed forward by President Claudia Sheinbaum that give little consideration to the business sector and other stakeholders. These reforms prioritize political criteria over technical or economic ones in areas such as labor, environmental policy, and bureaucratic matters.
Impact Level: High
Likelihood: Medium
- Electoral reforms that eliminate guarantees for free and fair political competition, and which limit the representation of opposition parties, are approved by the ruling coalition.
Impact Level: High
Likelihood: Very high
- Investment projects in key sectors such as energy and telecommunications, among others, are put on hold due to the uncertainty created by recently approved constitutional reforms —particularly those on strategic sectors and companies, the judiciary, and the dissolution of autonomous agencies— as well as the stalemate in implementing their corresponding secondary laws.
Impact Level: High
Likelihood: High
- Violent confrontations increase as a result of internal fractures in organized crime groups and a strategy to capture high ranking criminals, which hampers the transport of goods on highways and small businesses’ operations in regions with high criminal presence.
Impact Level: High
Likelihood: High
- A (bad) tax reform is introduced to boost public revenue —either through a comprehensive overhaul or sector-specific adjustments— as a result of fiscal constraints and the government’s need to fund its priority programs and projects
Impact Level: High
Likelihood: Medium
- The operational and planning capabilities of local governments continue to decline, impairing their ability to address local issues and needs (i.e. infrastructure and basic services). This decline stems from corruption, insufficient public resources, unqualified personnel, and increasing centralization of power that discourages local responsibility.
Impact Level: Medium
Likelihood: High
OTHER RELEVANT ISSUES FOR 2025
- The risk of a credit downgrade increases in 2025
- Pressure intensifies against water-intensive companies
- Decline in Pemex production compromises oil revenue and weakens the national industrial sector
- The National Housing Institute (Infonavit) invests workers’ resources in low-yield projects
- Insufficient electrical supply and blackouts
To read the report as it was published by Integralia, click here.
To read the full PDF as it was published by Integralia, click here.