A Verdict that Shakes the Business Foundations
In a turn that threatens to redefine the national economic landscape, the financial giant UBS Global Wealth Management has issued a warning that resonates like thunder in the corridors of corporate power. His forecast is clear and forceful: the judicial reform in Mexico is not just a change of rules, it is a slab that will dramatically increase the legal costs for companies operating in the country. This is not a simple adjustment, it is a structural factor of a profound uncertainty that hangs over the future of investment, a specter that could cool the spirit of the most daring entrepreneurs.
In a press conference that could well be the prologue of a new era of caution, Gabriela Soni, the head of investment strategy for Mexico at UBS, spoke words that will mark a before and after. With the serenity of someone announcing a storm, he declared that the legal cost for Mexico is destined to escalate. However, in an almost tragic act of faith, the demand to invest in the country remains strong. “The only way out,” he explained with a realism that cuts like a knife, “is that companies are going to demand a much higher risk premium to bet on our country, because figuring out how to operate in Mexico has suddenly become an infinite labyrinth.”
The Final Judgment for Corporations and the Sword of Damocles of the T-MEC
But how does this legal earthquake affect companies that are fighting for their survival? The answer paints a two-way scenario. On the one hand, the powerful large corporations, those titans with unlimited resources, will be able to adapt through dispute resolution mechanisms, although carrying the burden of higher costs on their backs. The real, heart-wrenching tragedy is reserved for the smallest companies. For them, this reform is not an obstacle, it is an insurmountable wall. “The problem is really for the smaller companies,” Soni warned, “for them, this can be a lethal issue, a challenge that they will not be able to overcome, because many times these new dispute resolution mechanisms entail such a high outlay that their fragile economies will not be able to absorb.”
And while the business world holds its breath, judicial uncertainty stands like an invisible judge. “Now, we find ourselves in the most absolute darkness, we still do not know how the judges are going to act,” confessed the strategist, “and this judicial uncertainty, this impenetrable fog, will continue to poison the investment prospects, becoming an already structural issue, a curse that will haunt our economy.”
But destiny has more cards on the table. Another epic battle looms on the horizon: the review of the T-MEC. UBS estimates, with the hope of a castaway who glimpses land, that a successful review of the trade agreement in 2026 will be the bulwark that reactivates private investment and improves economic prospects. Although the worst-case scenario has a low probability, hovering around a terrifying 5% or less, there is a more subtle and feasible threat. A risk that would be prolonged torture: that the treaty is not renewed for 16 years and remains subject to annual reviews between 2026 and 2036, an endless spiral of uncertainty that would strangle any hope of recovery of the investment.
The battlefields in this negotiation will be brutal: access to the energy market, stricter rules of origin than chains, working conditions and possible tariffs to avoid the triangulation of Asian products. Despite this conflict scenario, UBS predicts that Mexico, with the astuteness of an experienced strategist, will maintain a favorable commercial position.
As the clock ticks towards the decisive moment, gross fixed investment will remain contained, biding its time. Soni anticipates that the rebound will come, like a dawn after the darkest night, starting in the second half of 2026, driven by an increase in public investment. The road will be littered with obstacles, with temporary pressures on inflation and a pause in rate cuts by Banxico, before resuming the march towards a terminal rate of 6.5%. By the end of 2025, the firm predicts economic growth of a modest 0.5%, which will become 1.4% in 2026 and a promising 2.1% in 2027. Figures that, like a whisper of hope, could rise to the top if that long-awaited and successful renegotiation of the T-MEC.
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