Hailing the End of Graft in Mexico, Lawmakers Advance Judicial Overhaul

• The International Monetary Fund (IMF) on Tuesday, October 15, said it sees Mexico's economic growth slowing to around 1.5% this year, citing capacity constraints and tight monetary policy.
• The IMF also sees Mexico’s growth slowing further to 1.3% in 2025, while expecting inflation to close in on the central bank's target of 3%.
• Mexico's central bank, known as Banxico, lowered its benchmark interest rate to 10.50% in a split decision in September. But minutes from the meeting showed that the board members expect easing inflation could allow for further rate cuts.
• "Inflation risks remain on the upside," the IMF said, warning that weaker-than-expected economic growth in the United States, increased global risk aversion and unforeseen effects from recent reforms could weigh on Mexico's output.
• The IMF said that a recent judicial reform creates "important uncertainties about the effectiveness of contract enforcement and the predictability of the rule of law." Mexico's ruling party and allies pushed through the reform last month, arguing it will reduce corruption in the judiciary by implementing the popular election of judges and magistrates.
• Of note, the reform includes reducing the number of Mexican Supreme Court seats from 11 to 9 and limiting justices' tenure to 12 years (instead of the current 15). The reform also includes the Election of Justices and Federal Judges by popular vote, along with a New Judicial Administration Body and New Judicial Discipline Tribunal.

(Sources: Reuters & Mayar Brown LLP)