BBVA Points Out That Judicial Reform Affects Legal Stability in Mexico

11:15 12/09/2024 - PesoMXN.com

This Wednesday, the BBVA Research department highlighted that the recent approval of the judicial reform puts the rule of law at risk. According to the bank, this modification could lead to arbitrary enforcement of the law, negatively impacting the country's economic outlook.

Prior to these reforms, it was projected that Mexico's economy would grow by less than 2% by 2025, while inflation was expected to be around 3.5% annually for that same year, the bank noted. It is also anticipated that the Bank of Mexico (Banxico) will continue to lower interest rates, which would pose greater risks to the national economy. "The situation will demand higher risk premiums in the future. Rating agencies consider both quantitative and qualitative aspects, and these reforms could lead to unfavorable monitoring for Mexico or even a downgrade of its credit rating," it stated. While the urgency of implementing reforms in Mexico is recognized, particularly to address corruption and impunity, the bank cautions that these changes could do more harm than good.

The economic situation of a country is delicate, and any changes to legal structures can have profound effects. It is crucial to consider both the need for reforms and their potential repercussions, as an unstable financial environment can drive away investment and disrupt long-term growth.