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Mexico will hold its general election on June 2, 2024. Besides president, voters will also renew the 628 seats of the bicameral federal Congress, eight state governorships and the Mexico City mayorship, as well as more than 20,000 local offices.

Running for the presidency are Claudia Sheinbaum of the ruling National Regeneration Movement party, known as MORENA, and its allies, grouped under the Keep Making History coalition; Xóchitl Gálvez of the opposition coalition Strength and Heart for Mexico party, known as FCM; and Jorge Álvarez Máynez of the Citizens' Movement party, known as MC. The new president will be inaugurated on Oct. 1, 2024.

If elected, Sheinbaum is highly likely to maintain AMLO's broad policy direction. This includes a strong state presence in the energy sector, austerity cuts and significant social spending. Sheinbaum has pledged to maintain AMLO's signature policies, including social programs, investing in state-led infrastructure projects such as passenger rail networks, avoiding tax increases by further reducing government operational costs, and keeping financial and regulatory support for state-owned energy firms.

Sheinbaum's other policy priorities — legislative overhaul of the judiciary and electoral institutions, the suppression of regulatory organs and the administrative transfer of the National Guard to the military — will depend on the results for congressional elections, as many of them would require constitutional amendments.

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Major policy shifts are likely in energy and relations with the US if Gálvez wins. Gálvez's stated priorities include stronger state action against criminal groups as well as improvement of economic freedom. She is likely to remain reliant on the military — as AMLO has — to fight organized crime. Unlike AMLO, she has pledged to favor direct confrontation with criminals. To increase economic freedom, she has proposed for the state to limit its role to ensuring the rule of law and allowing private firms to be the main engine of growth. This is particularly important for the energy sector, in which Gálvez claims that, if elected, she would return to enforcing 2013 constitutional changes that opened all the activities in the sector to private participation.

Although foreign policy is not a major campaign issue, Gálvez has also suggested a more explicit alignment with the US. We maintain our assessment that AMLO has broadly aligned with the US in issues of strategic importance for the latter, such as migration containment, fentanyl trafficking and supply chain resilience. However, a Gálvez presidency would also be likely to adopt a tougher stance at a multinational level against Cuba, Venezuela and Nicaragua and also toward Russia and mainland China.

Both Sheinbaum and Gálvez have expressed their support for nearshoring, with different policy priorities. Gálvez has pointed to the current government's energy policy as the main hindrance to nearshoring, suggesting she would roll back policies and regulations enacted under the current administration, which have affected the prospects for private companies in that sector. A heightened focus on renewable power generation would also be likely.

Sheinbaum has also indicated that she would favor a more renewable-oriented energy policy but within a framework that prioritizes state-owned firms. Her approach to nearshoring involves developing this within a broader industrial policy including regional planning to avoid the concentration of new investments in the north and center of Mexico. This approach would also involve enacting regulations that favor technology transfer, the construction of local supply chains centered on small and medium-sized enterprises, or SMEs, and the increased percentage of national content for export-oriented goods.

Ahead of the scheduled review of the United States-Mexico-Canada Agreement, or USMCA, in 2026, Mexico is almost certain to favor its continuity and deepening of North American supply chains' integration, regardless of who is elected president.

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This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.