Buzzing Border, Oversight Power Plays & Deadly Rains
Mexico Decoded’s weekly briefing makes sense of the news that matters
1. Deadly Rains Drench Central Mexico
Five states across central and western Mexico have been pummeled by torrential rains —up to 11 inches in some areas— leaving 64 dead, 65 missing, and around 100,000 homes damaged or destroyed. Power has been cut for roughly 42,000 residents.
Decoding it:
President Sheinbaum has toured the disaster zones, pledging swift aid. But frustrated residents have voiced anger at her. This could mark one of the first real stress tests for her sky-high approval ratings.
2. Infrastructure Investment Bets on Stability Over Splash
Mexico’s proposed 2026 budget hikes public infrastructure investment—especially in energy—by 9.7%, bringing it to 2.5% of GDP.
Decoding it:
It’s a welcome bump, but Mexico’s still far from its 2014 peak of 4.3% of GDP. The government is signaling prudence: investing enough to show progress, but not enough to risk the deficit.
3. Mexico’s Factory Belt Is Heating Up
Industrial parks in northern Mexico are buzzing once more. After several slow years, companies are leasing up warehouses and factory space at a fast pace. Vacancy rates decreased between 0.5 and 0.3 percentage points in border cities compared to last quarter.
Decoding it:
Mexico is getting a new wave of investment, especially from companies seeking to avoid high U.S. tariffs. With Mexican exports facing only a 5% average tariff—much lower than for most countries—this could be the strongest sign yet that the “nearshoring boom” is finally happening.
4. From Power Grab to Power Play
Investors are surprised: President Sheinbaum’s picks to head Mexico’s new telecom and antitrust regulators—institutions reshaped by a controversial reform last year—turned out to be competent, independent technocrats.
Decoding it:
When Mexico merged and restructured its regulatory agencies, many feared it was a move to weaken oversight. The opposite seems to be happening. Sheinbaum appears to be empowering regulators to go after dominant players in sectors like telecom and banking —betting that more competition, not political favoritism, is what will fuel growth and deliver results for her base.
5. Citi Shuts the Door on Mexico’s Stingiest Billionaire
Citi has rejected tycoon Germán Larrea’s last-minute bid to buy Banamex—its Mexican retail bank. The move clears the way for talks with billionaire Fernando Chico Pardo, who’s negotiating to buy a 25% stake ahead of Citi’s planned IPO.
Decoding it:
Larrea fumbled the play. He skipped meetings with U.S. and Mexican regulators and, true to form as Mexico’s stingiest billionaire, offered less than Citi expects to make on the open market. Citi didn’t blink.