Mexico in Transition: Sheinbaum’s First Year, Judicial Overhaul, and an Economic Slowdown

MEXICO CITY, January 20, 2026 – The years 2024 and 2025 marked a period of profound political transformation and persistent challenges for Mexico. The nation elected its first female president, Claudia Sheinbaum, and embarked on a controversial overhaul of its judiciary, while grappling with organized crime and an economic slowdown. As President Sheinbaum completes her first full year in office, her administration balances the legacy of her predecessor, Andrés Manuel López Obrador (AMLO), with the pressures of a new era in U.S.-Mexico relations under President Donald Trump.

A Historic Political Realignment

The political landscape was decisively reshaped in 2024. On June 2, 2024, Claudia Sheinbaum of the ruling Morena party won a commanding victory with 59.75% of the vote, becoming Mexico’s first female president. Her inauguration on October 1, 2024, symbolized a new chapter, though one deeply connected to the “Fourth Transformation” movement of the outgoing AMLO. The election also cemented Morena’s dominance; the party and its allies secured a supermajority in the Chamber of Deputies and, after subsequent defections, in the Senate, granting the coalition unprecedented power to enact constitutional changes.

This political hegemony extended across the country, with Morena or its allies governing 24 of Mexico’s 32 states by late 2024, a level of control not seen since the PRI’s one-party rule in the 20th century. The traditional opposition parties—PAN, PRI, and PRD—were left with minimal federal clout.

Key Facts: Mexico’s Political & Security Landscape (2024-2025)

The Judicial Revolution and Security Challenges

One of the most consequential events was the sweeping judicial reform passed under AMLO and implemented under Sheinbaum. A constitutional amendment required all federal and state judges, including Supreme Court justices, to be elected by popular vote. The first such election was held on June 1, 2025, with a turnout of just 13%. Proponents argued it would purge corruption, while critics, including UN human rights bodies, warned it would politicize the judiciary and undermine its independence.

On security, the Sheinbaum administration inherited a severe crisis. While homicides showed a modest decline, extortion and violence by organized crime remained rampant. The government launched targeted operations, such as transferring cartel figures to the United States, and a new national plan against extortion. A significant scandal emerged within the Mexican Navy, implicating personnel in a massive fuel theft scheme known as huachicol fiscal. The November 2025 assassination of Uruapan Mayor Carlos Manzo, an anti-crime crusader, underscored the persistent threat to public officials.

An Economy Losing Momentum

Mexico’s economic trajectory shifted from post-pandemic recovery to a pronounced slowdown. Growth fell to an estimated 1.5% in 2024 from 3.3% in 2023, with forecasts for 2025 hovering around 1%. The slowdown was driven by weak domestic demand, falling investment, and fiscal consolidation. The state oil company Pemex, burdened by over $100 billion in debt, remained a major drag.

Inflation gradually declined, with the annual rate reaching 3.69% by December 2025, moving within the central bank’s target band. Banco de México (Banxico) embarked on an easing cycle, cutting its benchmark rate from a peak of 11% in 2024. However, core inflation, particularly in services, proved sticky. The Mexican peso showed resilience but faced volatility due to trade policy uncertainty.

Economic Indicators & Forecasts

The Trump Factor and the Road Ahead

The return of Donald Trump to the U.S. presidency in January 2025 defined the external context. Threats of tariffs, the designation of Mexican cartels as foreign terrorist organizations, and aggressive deportation policies created a climate of uncertainty. President Sheinbaum has sought to maintain a working relationship with Trump, emphasizing cooperation while defending Mexican sovereignty, particularly against calls for U.S. military action on Mexican soil.

The looming 2026 review of the USMCA trade agreement represents the next major test for bilateral relations. Domestically, Sheinbaum’s challenge is to stimulate a sluggish economy, ensure the new judicial system functions without eroding the rule of law, and deliver tangible improvements in public security—the issue that will likely define her presidency in the eyes of many Mexicans.

Frequently Asked Questions

What was the most significant change in Mexico in 2024?

The election and inauguration of Claudia Sheinbaum as Mexico’s first female president, representing a historic milestone while ensuring continuity of the political project started by her predecessor, Andrés Manuel López Obrador.

What are the concerns about Mexico’s judicial reform?

Critics, including international human rights bodies, argue that electing judges through popular vote politicizes the judiciary, threatens its independence, and could undermine the right to a fair trial by making judges accountable to political agendas rather than the law.

Is Mexico’s economy in a recession?

While not officially in a recession, economic growth slowed significantly to around 1.5% in 2024, with forecasts for 2025 near 1%. The economy faces headwinds from weak investment, fiscal tightening, and external trade uncertainty, but a recovery is projected for 2026.

How has the U.S. under President Trump impacted Mexico?

The impact has been substantial, including pressure on security cooperation (leading to extraditions of cartel members), threats of tariffs on Mexican exports, and an aggressive U.S. deportation policy affecting remittance flows and migration dynamics.