Mexican president-elect's team pledges economic stability

Claudia Sheinbaum celebrates her victory in Mexico's presidential election (CARL DE SOUZA)
Claudia Sheinbaum celebrates her victory in Mexico's presidential election (CARL DE SOUZA)

Mexico's finance minister reassured investors Tuesday that president-elect Claudia Sheinbaum would ensure the stability of Latin America's second-biggest economy, after her landslide election win rattled financial markets.

The country's stock market dropped six percent on Monday as investors worried that the left-wing candidate's crushing victory would make it easier to push through reforms potentially damaging to the economy and business.

Finance Minister Rogelio Ramirez de la O assured investors that "our project is based on financial discipline, respecting the autonomy of the (central) Bank of Mexico, adherence to the rule of law and facilitating national and foreign private investment," a statement said.

The government would liaise with investors and credit rating agencies to uphold its priorities of "macroeconomic stability" and "fiscal prudence," it added.

Mexico's main stock market rebounded by more than three percent on Tuesday as investors appeared to welcome the pledge.

On Monday, in her first cabinet announcement, Sheinbaum said that Ramirez de la O had agreed to stay in the key position when she takes over the presidency on October 1.

The former Mexico City mayor and key ruling party figure won around 59 percent of votes with more than 95 percent of ballots counted, according to the National Electoral Institute.

Sheinbaum, who will be Mexico's first woman president, inherits a fiscal deficit that the International Monetary Fund expects to reach 5.9 percent this year.

The credit ratings agency S&P Global Ratings said on Tuesday that it "doesn't believe that the new administration is likely to materially change the country's fiscal, monetary, or trade policies."

"Like previous administrations, the country's new leadership will face the challenge of maintaining macroeconomic stability while meeting public expectations of better living standards and more public services," it said.

"Although Mexico's economy grew 3.1 percent last year, it remains an underperformer compared to other emerging markets," the agency added.