Mexico elects Claudia Sheinbaum as first-ever female president

Mexico’s left-leaning climate scientist Claudia Sheinbaum has secured enough votes to become the Latin American country’s first-ever female president.

The country’s electoral institute published a rapid count estimate late Sunday night saying that Sheinbaum had won the presidential election. The estimate has a margin of error of +/-1.5%, the institute said.

A protégé of her long-time ally and mentor Andrés Manuel López Obrador, Sheinbaum is now poised to succeed AMLO when his six-year term as president comes to an end on Oct. 1.

In a speech after the preliminary results, Sheinbaum said the government will have “republican austerity, financial and fiscal discipline and autonomy,” according to a CNBC translation, adding that the country “will never have an authoritarian or oppressive government.”

“We will maintain the required division between the economic power and the political power. We will always defend and we will work for the ultimate interest of the people of Mexico and of the nation,” she said.

Sheinbaum also sketched out a loose vision of Mexico’s ties with neighboring U.S. under her stewardship. “With the United States, there will be a relationship of friendship, mutual respect and equality, as has been the case until now. And we will always defend Mexicans who find themselves on the other side of the frontier,” she said.

The U.S. dollar was little changed against the Mexican peso around 1 a.m. local time.

Current President Lopez Obrador congratulated Sheinbaum on becoming the country’s first female premier in 200 years in a video address translated by CNBC: “The name of Mexico was brought once more to heights. It is a pride to be Mexican.”

Sheinbaum, a former Mexico City mayor who was dubbed the “ice lady” by her political rivals, has pledged to largely continue with AMLO’s policies and has received the backing of his ruling Morena party.

After dominating the polls for months, Sheinbaum defeated her election rival, center-right businesswoman Xóchitl Gálvez, in the landmark vote.

Galvez acknowledged the provisional results in a speech following their release, saying she had communicated with Sheinbaum to concede her defeat.

“I acknowledged the results because I love Mexico, and I know that if things go well for the government, they will go well for our country,” she said according to a CNBC translation, describing the election as “historical,” but also dubbing it “the most violent” in the country’s history. Thirty-seven candidates were assassinated during the electoral process, according to Reuters.

“My acknowledgment [of defeat] is accompanied by a firm call for results and solutions to the severe problems of the country,” Galvez said, urging her audience to “count for me as a fighter, who will never stop fighting for a Mexico where life, truth and freedom are respected.”

Sheinbaum takes custody of a Mexico still in the throes of economic recovery after a severe downturn during the Covid-19 pandemic. The country shed 8.5% of its GDP year-on-year in 2020 — its largest contraction since the 1930s, according to Reuters.

The World Bank says that, over the last three decades, the nation has “underperformed in terms of growth, inclusion, and poverty reduction compared to similar countries.”

In a late-May release, Deloitte Senior Economist Marcos Novelo highlighted both this steep Covid-led economic decline and the lag in the country’s rebound, relative to other major economies.

“We suspect that, following a shock as severe as the pandemic, there are still some distortions playing out in Mexico’s economic data, which are generating an illusion that the recovery is more dynamic this time than compared to the past,” he wrote.

The International Monetary Fund expects the Latin American country of more than 132 million people to record GDP growth of 2.4% this year, compared with a 3.2% expansion in 2023.

Analysts have said Mexico’s next government will face significant fiscal and structural realities, requiring tough choices when balancing investment plans, the popular — yet costly — welfare programs and perhaps most importantly, Pemex. The state petroleum company has been struggling under soaring debt levels and lower-than-expected oil production.

“Without a concrete solution to the elephant in the room — Pemex — neither external market sentiment nor the credit ratings agencies are convinced of Sheinbaum’s fiscal credentials,” analysts at Verisk Maplecroft said in a recent research note.

“Her main proposal — to kick the can down the road by refinancing Pemex’s upcoming debt obligations (USD 6.8 billion in 2025, followed by USD 10.5 billion in 2026 — and a total of USD 39 billion by the end of the decade) — are unlikely to wash with investors, given Pemex’s deep structural issues,” they added.

Sheinbaum previously worked as a contributing author to a report from the U.N.’s Intergovernmental Panel on Climate Change. Yet, the 61-year-old did not make the climate threats facing Mexico a central part of her campaign.