Ramírez de la O’s challenge to restore trust – El Financiero

The new Secretary of the Treasury, Rogelio Ramirez de la O, who has yet to be ratified for the position by the Chamber of Deputies, pledged to promote “a good economic climate and trust with the entrepreneurs and investors, promoting the economic recovery of the country that began in 2021 ”.

In a press release issued yesterday, the Ministry of Finance made it clear the main commitments of Ramírez de la O, which they are summarized in macroeconomic stability, fiscal discipline, limited indebtedness and austerity in spending.

He also informed that the changes of officials in the Treasury “will be announced in due course”, as the intention of the incoming secretary is “to maintain an orderly transition”, as well as “to ensure a 2022 Economic Package in a timely manner.”

No reference to rising inflation globally and also nationally, nor to the emergence of new variants of the virus SARS-CoV-2, which not only make containing the pandemic more challenging, but also pose a risk to economic recovery.

It is striking that the new person in charge of managing the country’s public finances consider it necessary to build trust among entrepreneurs and investors, whose perceptions of Mexico have been affected by government decisions.

Just a week ago the monthly survey conducted by Bank of America among Latin American fund managers was published, where the sample is 32 participants who manage approximately 53 billion dollars in assets.

A first conclusion is that the feeling about Mexico for the next six months stay positive. So much so that, according to the investors consulted, it seems less and less likely that sovereign debt will lose investment grade.

In July only 31 percent believe that Mexico will be subject to a cut in its sovereign credit rating. A year ago, 77 percent thought the country was going to lose investment grade eventually.

However, 38 percent of the fund managers consulted consider that the main risk in Mexico is government decisions.

The figure represents an increase compared to the previous survey, when only 30 percent of investors saw the decisions of the current administration as the greatest risk in the country.

Various decisions recent, not just governmental, have affected the confidence of the investors about mexico and have been cause for concern of the sector business.

Stand out deterioration of the frame institutional from the country, the questions reiterated by President López Obrador autonomous bodies and reforms about the laws of the electricity and hydrocarbon sectors, which modify the current rules to favor CFE and Pemex.

These reforms, which cause high uncertainty about the energy policy of the ‘transformation government’, are being challenged by individuals before the Judiciary.

Regarding the institutional sphere, first the Supreme Court of Justice of the Nation authorized an ambiguous version of the popular consultation proposed by AMLO and convened for August 1 to investigate former presidents of the Republic.

Later, Congress approved an amendment to the regulatory laws of the Judicial Power, which extends the duration of the term of Minister Arturo Zaldívar as president of the SCJN for two years.

The consultation is not only controversial, but also calls into question the institutional autonomy of the Court, while the reform borders on the illegal and unconstitutional, since the mandate of the president of the SCJN established in the Constitution is four years, not six .

Added to this are the attacks and questioning of the functions of the autonomous bodies, especially the INAI, Cofece and IFT, by President López Obrador.

It is positive that one of Ramírez de la O’s priorities is to seek the return of a favorable business environment and improved trust of entrepreneurs and investors.

Otherwise, the recovery of private investment will be limited and concerns about the Mexican economy will remain, whose reactivation also requires legal certainty and certainty.


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