The  National Institute of Statistics and Geography (INEGI)  reported that the country’s economic activity grew by 0.6% at a monthly rate in July 2024, according to the Global Indicator of Economic Activity (IGAE) , which allows us to know and monitor the evolution of the real sector of the economy.

In this report, Inegi highlighted that by component, in the seventh month this year and with figures adjusted for seasonality, primary activities , which include agriculture, livestock, fishing and other activities, grew 11.6 percent .

Meanwhile, tertiary services , which include services such as trade, transportation and communications, education and health, increased by 0.4% ; and secondary services , which include manufacturing and construction, grew by 0.2 percent  in July 2024.

At an annual rate and with seasonally adjusted series, the IGAE increased by 2% in real terms. By major groups of activities, primary activities increased by 12.5%; tertiary activities by 2.2% and secondary activities by 0.6%.

These figures come after the Gross Domestic Product (GDP) in the second quarter of 2024 in Mexico registered a growth of 0.2% , compared to the first three months of the year.

Financial specialists and institutions do not perceive a favorable outlook for GDP, and have therefore reduced their growth forecasts to between 1.5 and 2.3% this year for various reasons, including the uncertainty generated by the reform of the Judiciary and the disappearance of autonomous bodies .

Also, there is the expectation of a change of government in the country with the arrival of Claudia Sheinbaum to the Presidency of the Republic, who will assume office on October 1.

Furthermore, on September 18, the  Federal Open Market Committee (FOMC) of the  United States Federal Reserve cut the funding rate by 50 basis points (bp), which will place the rate between 4.75 and 5.00 points.

For various analysts in the sector, the Fed’s decision sends a message about where the economy is headed, which could affect Mexico due to the close commercial relationship it has with its northern neighbor .

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The Mexican Association of Automobile Distributors (AMDA) considered that the reform to the Judicial Branch, proposed by President Andrés Manuel López Obrador, violates independence in the matter, by wanting to appoint judges, ministers and magistrates by popular vote, and noted that it would also impact the viability of investments .

AMDA stated in a statement its position on the initiative, which was approved on August 26 by the Constitutional Affairs Committee of the Chamber of Deputies .

The appointment of judges, ministers and magistrates by popular election, the organization noted, “far from providing legal certainty to citizens, deepens the discretion of decisions, politicizes it and does not define objective criteria for an adequate selection of the required profiles,” since one of the consequences would be the weakening of the judicial career .

He said that this will not solve the problems facing the judicial system, and although AMDA indicated that reform is necessary to improve it, he specified that “ institutional destruction is not the way to promote a higher state of social coexistence.”

Economically, he added, judicial reform puts the viability of investments at risk and leaves them highly vulnerable to the power of the Executive.

It is worth remembering that the reform of the Judicial Branch has triggered demonstrations and protests, even the ambassadors of Canada in Mexico , Graeme C. Clark, and of the United States, Ken Salazar , expressed their concern about some points of this initiative, which has generated legal uncertainty among foreign investors.

It has also caused tensions between the nations that make up the United States-Mexico-Canada Agreement (USMCA) , which will be reviewed in 2026, leading to a “diplomatic pause” between the country and the US and Canadian governments.

In light of the various expressions against this reform and the rethinking that business organizations have suggested, the president-elect, Claudia Sheinbaum , asked not to accelerate the discussion of the judicial reform that, according to representatives of various chambers of commerce in Mexico, would affect the benefits of nearshoring (relocation of production lines in the country).

With a new legislature in the Mexican Congress, businessmen, workers and part of society that has expressed its rejection of this initiative, hope that this approach will be reconsidered.

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The reform to the Judicial Branch , proposed by the president of Mexico, Andrés Manuel López Obrador , which proposes, among other measures, that judges, ministers and magistrates can be elected by popular vote, carries the risk of canceling foreign investment projects , capital flight and would put at risk the revision of the Treaty between Mexico, the United States and Canada (T-MEC) , according to specialists in the matter.

It also opens the possibility of increased labour complaints through the Labour Rapid Response Mechanism (LRRM) under the trade agreement.

“In the short term, labor lawsuits against Mexico by the United States and Canada through the MLRR will increase due to the violation of labor rights by companies located in the country,” warned Joel Hernández Reyes, director of the Hernández Reyes y Asociados Law Firm .

In a statement, the union stressed that it is worrying that the conflict over judicial reform has escalated to the trade relationship between the three countries, adding that with the withdrawal of investments, there will also be job losses, which will disrupt workers’ rights , and as a consequence, a significant number of individual lawsuits will be observed.

The ambassadors of Canada in Mexico, Graeme C. Clark , and of the United States , Ken Salazar , expressed their concern about some points of said reform, which has generated legal uncertainty among foreign investors .

In response to this, on August 27, President López Obrador took a “diplomatic pause” with these North American nations, which businessmen consider worrying in the run-up to the review of the T-MEC, which will take place in 2026 .

Amid nationwide protests by workers in the Judiciary, who have even stopped work, on August 26 the Constitutional Affairs Committee of the Chamber of Deputies approved the general opinion of the aforementioned reform, with 22 votes in favor and 17 against .

In the face of various expressions against this reform and rethinking that business organizations have suggested, the recently appointed coordinator of Morena in the Chamber of Deputies , Ricardo Monreal , revealed that the president-elect, Claudia Sheinbaum , asked him not to accelerate the discussion of the judicial reform that, according to representatives of various chambers of commerce in Mexico, would disrupt and affect the benefits of nearshoring , that is, the relocation of production lines in the country.

In this context, Larry Rubin , president of the American Society of Mexico (AmSoc) , considered that the T-MEC is solid in the face of the reform to the Judicial Branch and will remain regardless of the results , although he noted that the modifications must give certainty to foreign investors, especially with the entry of a new legislature in the Mexican Congress of the Union on September 1.

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