Judicial reform shatters investor trust, experts warn of project slowdown in Mexico

Mexico's recent judicial reform has significantly eroded investor confidence, creating an environment of uncertainty that threatens the inflow of crucial investment projects. Experts warn that the changes, described as destructive rather than corrective, are actively discouraging capital from entering the country.

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the reform (of the judicial system) that was truly made to discourage investment in Mexico…

During the "Summit of large companies, business decisions in an environment of high uncertainty," organized by Coparmex, former Supreme Court Justice Javier Laynez stated that the reform has negatively impacted investment. He noted that destroying a system that was functioning, albeit imperfectly, was a grave misstep. Concerns were also raised about the Financial Intelligence Unit potentially freezing accounts without adequate oversight, which could harm businesses.

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it is incredible, to say the least, that what more or less worked for you, even if it required corrections, you destroy it, because that was a destruction…

Coparmex President Juan José Sierra echoed these concerns, highlighting that investments are stalled due to a lack of legal certainty, energy shortages, regulatory hurdles, and unstable operating conditions. He stressed that capital flows to places with trust, legal certainty, clear rules, and stable institutions, qualities currently in short supply in Mexico.

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investments do not arrive solely due to geographical location. Capital arrives where there is trust, where there is legal certainty, where the rules are clear and institutions generate stability.

Mariana Campos, Director General of México Evalúa, pointed out that institutions have been weakened by this judicial reform and other constitutional changes. Coupled with uncertainty surrounding the USMCA trade agreement and the threat of credit rating downgrades, these factors are breaking long-term investor confidence, potentially leading to a loss of investment grade status for Mexico. Experts argue that no trade agreement can substitute for the internal conditions necessary to attract investment and foster sustained growth.

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Mexico cannot waste the most important opportunity of the last decades.