Mexico's current fiscal expenditure under President AMLO has led to the country's largest budget deficit since the 1980s.
Mexico's ruling party, Morena, is poised to secure a landslide victory in the upcoming June elections, according to recent polls. The party's candidate, Claudia Sheinbaum, has been leading in the polls, especially in poorer southern states like Oaxaca.
Sheinbaum, who was elected as the successor to Andrés Manuel López Obrador in 2024, has been at the helm of the country since the beginning of the year. Under her leadership, the government has increased spending, with a focus on social programs and state-owned companies.
The government has set aside $43 billion for social programs in 2023, with over half allocated for the elderly. This includes the new universal pension program, which has seen pensions more than double over the six years of Lopez Obrador's government. Payments under this program are made every two months at new public banks set up across the country.
However, this increased spending has led to a growing budget deficit. The deficit is expected to reach its highest level since the 1980s, with debt-service costs this year expected to reach 3.7% of economic output, the most in at least three decades.
Despite these financial strains, the Mexican peso has been the top emerging-market currency this year. This could be due to the government's efforts to boost the economy, such as investing heavily in infrastructure and the state-owned oil company Pemex.
One of the largest infrastructure projects is a $30 billion tourist train, a nearly $20 billion oil refinery, and a new airport for the capital. The government is also starting a state-run airline, although it is not expected to make money in the short term.
The AMLO government has also been working on finishing landmark construction projects, such as the Mayan Train, a railway project connecting various cities in the Yucatan Peninsula. However, the infrastructure works are not yet completed, which means seeing any returns on investment could take longer than originally expected.
The economy of the state of Oaxaca, which was taken over by Morena in December 2022, has seen significant growth. It grew 10% in the first nine months of last year, the most in the country, largely thanks to public spending.
The government's efforts to boost the economy and provide for its citizens have not gone unnoticed. The new universal pension program has enrolled locals like Jimenez Ibañez, whose mother sells handmade totopos. Among voters who receive social programs or whose family members do, 64% say they intend to vote for Sheinbaum.
The AMLO government celebrated Benito Juarez's 215th anniversary in Guelatao, Oaxaca, marking a significant moment in Mexican history. The celebration was a testament to the government's commitment to honouring Mexico's past while working towards a brighter future.
In a notable move, a previous governor of Oaxaca, who was from the opposition party PRI, defected and endorsed Sheinbaum after his term ended. This endorsement has likely strengthened Sheinbaum's position in the upcoming elections.
As the June elections approach, the focus remains on the Morena party and Sheinbaum's leadership. With her commanding poll lead and the party's commitment to social programs and infrastructure development, it seems that Morena is well-positioned for a landslide victory.
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