Mexico’s 2024 election outlook: Lessons from the Latin American region
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Mexico’s 2024 election outlook: Lessons from the Latin American region

Key takeaways:

  • In just under five months on 2 June 2024, Mexico will elect its next president and all 628 members of Congress
  • The market’s focus over the next few months will be on identifying the differences in the policy platforms of two candidates from the center-left
  • Ultimately, we expect governability in Mexico to weaken, regardless of who wins the 2024 election

Unlike recent elections in Latin America where there were clear distinctions between candidates, Mexico’s election seems to pit one center-leftist against another.

The focus for voters and the market over the next several months will be on discerning the differences between the two leading candidates’ policy platforms. While this is clearly important, other countries in the region have demonstrated recently that the individual who wins the presidency is not necessarily a game-changer from a policymaking point of view. We believe that regardless of who wins the election, Mexico is bound for a similar fate as other countries in the region, where governability has weakened and policy proposals have stagnated, even after seemingly dramatic presidential election outcomes over the past two years.

Looking back at elections in the region since 2021, there are several themes that have emerged  -polarisation (i.e., narrow victories, with a couple of exceptions), weak governability (i.e., absence of any party holding a majority in the legislative branch), and voters’ apparent and unfulfilled desire for change. We have witnessed this desire for change in the election outcomes of Peru, Chile, Colombia, Brazil, and Argentina. Meanwhile, Ecuador is perhaps the best outlying example where voters appeared to opt for continuity, not just once (with Guillermo Lasso’s election) but twice by recently electing Daniel Noboa1. This is an illusion and more indicative of a population that rejects correismo, the movement or policies associated with an Ecuadorian former president Rafael Correa2, than one that desires continuity. As with Ecuador, Argentina’s recent election appeared to be a rejection of a longstanding political movement, kirchnerismo3, rather than a vote for a particular policy platform.

The apparent desire for change throughout Latin America has not actually resulted in major policy changes. In Peru, Pedro Castillo was impeached after less than a year and a half in office and his replacement, Dina Boluarte, now seems to represent the establishment; in Chile, the constitutional re-write process lasted over three years and ended in both drafts being rejected by the population; in Colombia, Gustavo Petro’s coalition in Congress has fallen apart, steadily weakening his ambitious reform agenda; in Ecuador, Lasso’s governability was so weak that he didn’t finish his term.

How can we apply all these lessons to Mexico’s upcoming elections in June 2024? Mexico is one of the very few Latin American countries where the ruling party’s coalition has benefited from a majority in Congress over the past several years, though that majority shrank meaningfully in the 2021 mid-term elections. President Andrés Manuel López Obrador, known as “AMLO,” has an approval rating that remains high at 68%, but it is unclear to what extent his charisma will extend into the June 2024 elections since he will not be a candidate. While the ruling Morena party’s candidate, Claudia Scheinbaum, is currently favored to win the presidency, it seems that her coalition’s position in Congress is likely to shrink further, especially if opposition parties gain momentum ahead of elections, as seems likely. This would leave Scheinbaum with relatively weaker governability than AMLO enjoyed.

But what if Xochitl Gálvez, the main opposition candidate, wins the presidency? She is a member of the PAN party, one of three parties in the opposition’s Fuerza y Corazón por México coalition. It is difficult to envision her coalition securing a majority in Congress, especially now that we know that Movimiento Ciudadano (MC) will run its own candidate rather than joining the coalition. In short, our sense is that regardless of who wins the 2024 presidential race in Mexico, Congress will become more fragmented, and the relatively strong governability experienced under the AMLO administration is likely to weaken and social tensions are likely to rise, making Mexico look – from a political and social perspective – a lot more like other countries in the region.

Select Latin American Presidential Election Results
Latin American Presidential Election Results
19 Januar 2024
Sarah Glendon
Sarah Glendon
Senior Research Analyst, Emerging Markets Debt Team
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Mexico’s 2024 election outlook: Lessons from the Latin American region

1 The Guardian, Banana fortune heir Daniel Noboa wins Ecuador presidential election, 16 October 2023
2 Nacla, Ecuador: Will Correísmo succeed in surfing the second progressive wave? 4 August 2023
3 Reuters, In Argentina’s icy south, the Kirchner political dynasty fades, 21 October 2023

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For use by professional clients and/or equivalent investor types in your jurisdiction (not to be used with or passed on to retail clients). For marketing purposes.

 

This document is intended for informational purposes only and should not be considered representative of any particular investment. This should not be considered an offer or solicitation to buy or sell any securities or other financial instruments, or to provide investment advice or services. Investing involves risk including the risk of loss of principal. Your capital is at risk. Market risk may affect a single issuer, sector of the economy, industry or the market as a whole. The value of investments is not guaranteed, and therefore an investor may not get back the amount invested. International investing involves certain risks and volatility due to potential political, economic or currency fluctuations and different financial and accounting standards. The securities included herein are for illustrative purposes only, subject to change and should not be construed as a recommendation to buy or sell. Securities discussed may or may not prove profitable. The views expressed are as of the date given, may change as market or other conditions change and may differ from views expressed by other Columbia Threadneedle Investments (Columbia Threadneedle) associates or affiliates. Actual investments or investment decisions made by Columbia Threadneedle and its affiliates, whether for its own account or on behalf of clients, may not necessarily reflect the views expressed. This information is not intended to provide investment advice and does not take into consideration individual investor circumstances. Investment decisions should always be made based on an investor’s specific financial needs, objectives, goals, time horizon and risk tolerance. Asset classes described may not be suitable for all investors. Past performance does not guarantee future results, and no forecast should be considered a guarantee either. Information and opinions provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed. This document and its contents have not been reviewed by any regulatory authority.

 

In Australia: Issued by Threadneedle Investments Singapore (Pte.) Limited [“TIS”], ARBN 600 027 414. TIS is exempt from the requirement to hold an Australian financial services licence under the Corporations Act 2001 (Cth) and relies on Class Order 03/1102 in respect of the financial services it provides to wholesale clients in Australia. This document should only be distributed in Australia to “wholesale clients” as defined in Section 761G of the Corporations Act. TIS is regulated in Singapore (Registration number: 201101559W) by the Monetary Authority of Singapore under the Securities and Futures Act (Chapter 289), which differ from Australian laws.

 

In Singapore: Issued by Threadneedle Investments Singapore (Pte.) Limited, 3 Killiney Road, #07-07, Winsland House 1, Singapore 239519, which is regulated in Singapore by the Monetary Authority of Singapore under the Securities and Futures Act (Chapter 289). Registration number: 201101559W. This advertisement has not been reviewed by the Monetary Authority of Singapore.

 

In Hong Kong: Issued by Threadneedle Portfolio Services Hong Kong Limited 天利投資管理香港有限公司. Unit 3004, Two Exchange Square, 8 Connaught Place, Hong Kong, which is licensed by the Securities and Futures Commission (“SFC”) to conduct Type 1 regulated activities (CE:AQA779). Registered in Hong Kong under the Companies Ordinance (Chapter 622), No. 1173058.

 

In Japan: Issued by Columbia Threadneedle Investments Japan Co., Ltd. Financial Instruments Business Operator, The Director-General of Kanto Local Finance Bureau (FIBO) No.3281, and a member of Japan Investment Advisers Association and Type II Financial Instruments Firms Association.

 

In the UK: Issued by Threadneedle Asset Management Limited, No. 573204 and/or Columbia Threadneedle Management Limited, No. 517895, both registered in England and Wales and authorised and regulated in the UK by the Financial Conduct Authority.

 

In the EEA: Issued by Threadneedle Management Luxembourg S.A., registered with the Registre de Commerce et des Sociétés (Luxembourg), No. B 110242 and/or Columbia Threadneedle Netherlands B.V., regulated by the Dutch Authority for the Financial Markets (AFM), registered No. 08068841.

 

In Switzerland: Issued by Threadneedle Portfolio Services AG, an unregulated Swiss firm or Columbia Threadneedle Management (Swiss) GmbH, acting as representative office of Columbia Threadneedle Management Limited, authorised and regulated by the Swiss Financial Market Supervisory Authority (FINMA).

 

In the Middle East: This document is distributed by Columbia Threadneedle Investments (ME) Limited, which is regulated by the Dubai Financial Services Authority (DFSA). For Distributors: This document is intended to provide distributors with information about Group products and services and is not for further distribution. For Institutional Clients: The information in this document is not intended as financial advice and is only intended for persons with appropriate investment knowledge and who meet the regulatory criteria to be classified as a Professional Client or Market Counterparties and no other Person should act upon it.

 

Columbia Threadneedle Investments is the global brand name of the Columbia and Threadneedle group of companies.

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Risk Disclaimer

For use by professional clients and/or equivalent investor types in your jurisdiction (not to be used with or passed on to retail clients). For marketing purposes.

 

This document is intended for informational purposes only and should not be considered representative of any particular investment. This should not be considered an offer or solicitation to buy or sell any securities or other financial instruments, or to provide investment advice or services. Investing involves risk including the risk of loss of principal. Your capital is at risk. Market risk may affect a single issuer, sector of the economy, industry or the market as a whole. The value of investments is not guaranteed, and therefore an investor may not get back the amount invested. International investing involves certain risks and volatility due to potential political, economic or currency fluctuations and different financial and accounting standards. The securities included herein are for illustrative purposes only, subject to change and should not be construed as a recommendation to buy or sell. Securities discussed may or may not prove profitable. The views expressed are as of the date given, may change as market or other conditions change and may differ from views expressed by other Columbia Threadneedle Investments (Columbia Threadneedle) associates or affiliates. Actual investments or investment decisions made by Columbia Threadneedle and its affiliates, whether for its own account or on behalf of clients, may not necessarily reflect the views expressed. This information is not intended to provide investment advice and does not take into consideration individual investor circumstances. Investment decisions should always be made based on an investor’s specific financial needs, objectives, goals, time horizon and risk tolerance. Asset classes described may not be suitable for all investors. Past performance does not guarantee future results, and no forecast should be considered a guarantee either. Information and opinions provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed. This document and its contents have not been reviewed by any regulatory authority.

 

In Australia: Issued by Threadneedle Investments Singapore (Pte.) Limited [“TIS”], ARBN 600 027 414. TIS is exempt from the requirement to hold an Australian financial services licence under the Corporations Act 2001 (Cth) and relies on Class Order 03/1102 in respect of the financial services it provides to wholesale clients in Australia. This document should only be distributed in Australia to “wholesale clients” as defined in Section 761G of the Corporations Act. TIS is regulated in Singapore (Registration number: 201101559W) by the Monetary Authority of Singapore under the Securities and Futures Act (Chapter 289), which differ from Australian laws.

 

In Singapore: Issued by Threadneedle Investments Singapore (Pte.) Limited, 3 Killiney Road, #07-07, Winsland House 1, Singapore 239519, which is regulated in Singapore by the Monetary Authority of Singapore under the Securities and Futures Act (Chapter 289). Registration number: 201101559W. This advertisement has not been reviewed by the Monetary Authority of Singapore.

 

In Hong Kong: Issued by Threadneedle Portfolio Services Hong Kong Limited 天利投資管理香港有限公司. Unit 3004, Two Exchange Square, 8 Connaught Place, Hong Kong, which is licensed by the Securities and Futures Commission (“SFC”) to conduct Type 1 regulated activities (CE:AQA779). Registered in Hong Kong under the Companies Ordinance (Chapter 622), No. 1173058.

 

In Japan: Issued by Columbia Threadneedle Investments Japan Co., Ltd. Financial Instruments Business Operator, The Director-General of Kanto Local Finance Bureau (FIBO) No.3281, and a member of Japan Investment Advisers Association and Type II Financial Instruments Firms Association.

 

In the UK: Issued by Threadneedle Asset Management Limited, No. 573204 and/or Columbia Threadneedle Management Limited, No. 517895, both registered in England and Wales and authorised and regulated in the UK by the Financial Conduct Authority.

 

In the EEA: Issued by Threadneedle Management Luxembourg S.A., registered with the Registre de Commerce et des Sociétés (Luxembourg), No. B 110242 and/or Columbia Threadneedle Netherlands B.V., regulated by the Dutch Authority for the Financial Markets (AFM), registered No. 08068841.

 

In Switzerland: Issued by Threadneedle Portfolio Services AG, an unregulated Swiss firm or Columbia Threadneedle Management (Swiss) GmbH, acting as representative office of Columbia Threadneedle Management Limited, authorised and regulated by the Swiss Financial Market Supervisory Authority (FINMA).

 

In the Middle East: This document is distributed by Columbia Threadneedle Investments (ME) Limited, which is regulated by the Dubai Financial Services Authority (DFSA). For Distributors: This document is intended to provide distributors with information about Group products and services and is not for further distribution. For Institutional Clients: The information in this document is not intended as financial advice and is only intended for persons with appropriate investment knowledge and who meet the regulatory criteria to be classified as a Professional Client or Market Counterparties and no other Person should act upon it.

 

Columbia Threadneedle Investments is the global brand name of the Columbia and Threadneedle group of companies.

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