Economic resilience amid trade uncertainty
President Claudia Sheinbaum delivered her second annual government report on Tuesday, presenting a sweeping 67-minute address that portrayed Mexico as a nation advancing toward prosperity despite international headwinds. Speaking to an audience of federal and state officials and business leaders at the National Palace, Sheinbaum declared herself "convinced" that Mexico is on "the path to shared prosperity, with independence, freedom and a lot of dignity."
The president, approaching her second year in office with a 68% approval rating and maintaining strong public support, used the occasion to highlight achievements across economic development, public safety, infrastructure and social welfare. "I appear before the people of Mexico nearly two years after assuming the presidency of the republic. I do so with the certainty that we are transforming public life in this country," Sheinbaum stated at the outset.
Sheinbaum acknowledged that her administration has navigated "difficult international circumstances, marked by a change in the tariff policy of the U.S. government," including tariffs on vehicles, steel and aluminum that created challenging conditions for Mexico and the global economy. Despite these headwinds, she asserted that "the Mexican economy remains stable and continues to grow."
The president cited record-high foreign direct investment of nearly $35 billion in the first half of 2026, representing a 12% increase over the same period in 2024. Economic growth reached 1.4% sequentially in the second quarter and 1.9% annually, while more than 60 million people are employed with an unemployment rate of just 2.7%. Inflation has declined to a headline rate of 3.26% in mid-August, and the peso has strengthened to around 17 to the dollar.
On July 1, 2026, the United States formally declined to extend the United States-Mexico-Canada Agreement for an additional 16-year period during the mandatory six-year joint review. This decision triggered annual review processes that will continue until the agreement's scheduled expiration in 2036, though the trade pact remains fully operational. Sheinbaum noted that dialogue with the Trump administration on trade issues continues, expressing hope for reaching an understanding. Mexico has consolidated its position as the top exporter to and trade partner of the United States in 2026.
The president highlighted that federal government revenue reached a record high of more than 6.4 trillion pesos last year, with tax income continuing to increase in 2026. Monthly minimum wage has risen 154% in real terms since 2018 to reach 9,582 pesos in 2026, while the northern border minimum wage stands at 13,409 pesos monthly. The average formal sector wage reached an all-time high of 20,212 pesos per month.
Plan Mexico drives industrial development
Sheinbaum reported progress on Plan Mexico, her ambitious economic initiative with 13 goals including elevating Mexico to the world's 10th largest economy by 2030. Two investment incentive decrees have been published, and 10 of 25 planned Economic Development Hubs for Well-Being are under development. Twenty-five of the targeted 100 industrial parks are now operational.
The Presidential Office for Investment Promotion operates a one-stop shop approving project applications within 60 days, having greenlit 19 projects totaling $3.76 billion in four months. Bureaucratic procedures have been simplified by 60%, requirements reduced by 66%, and average response times cut by 50%.
Security improvements and cartel operations
Addressing public safety, Sheinbaum declared that "the peace and tranquility of families" remains a top priority. She claimed a 51% reduction in homicides comparing July 2026 to September 2024, the final month of former President López Obrador's term. The annual decline in murders during the first seven months of 2026 was 30.8%.
Government data from early 2026 showed Mexico's homicide rate fell to 17.5 per 100,000 people in 2025, the lowest per capita rate since 2015, with an average of 64 homicides daily representing a 30.2% year-over-year decline. Through the first five months of 2026, Mexico recorded 7,617 homicide victims, down 29.8% from the same period in 2025.
The president highlighted that high-impact crime incidence has decreased 54% compared to 2018 levels. Security forces arrested approximately 63,000 people for alleged high-impact crimes between October 2024 and July 2026, including 207 priority targets from organized crime groups.
On February 22, 2026, Mexican military forces killed Nemesio Oseguera Cervantes, known as "El Mencho," leader of the Jalisco New Generation Cartel, during an operation in Tapalpa, Jalisco, conducted with U.S. intelligence support. The cartel leader, who carried a $15 million U.S. bounty, died from wounds sustained during the operation. The killing triggered widespread retaliatory violence across multiple Mexican states, with criminal actors hijacking and burning vehicles, deploying roadblocks and attacking businesses. Multiple airlines temporarily cancelled flights to Puerto Vallarta, Guadalajara and Mazatlán.
Authorities have seized 32,824 firearms and 519 tonnes of drugs during Sheinbaum's presidency, while dismantling 2,725 clandestine drug laboratories.
Welfare programs and healthcare expansion
The administration has maintained all welfare and social programs from the previous government while adding new initiatives, including educational scholarships and cash transfers for women aged 60 and over. Welfare programs will benefit nearly 43 million Mexicans in 2026 with a historic investment of one trillion pesos.
In healthcare, Sheinbaum reported that 33 new public hospitals and 47 healthcare centers have opened during her nearly two years in office. The government aims to add 9,000 beds to the public health system by 2030. Through the consolidated purchasing program and the Rutas de la Salud distribution system, 2 billion items of medications and medical supplies have been distributed.
Infrastructure development advances
The president enumerated completed infrastructure projects including highways, 70 bridges and interchanges, and 135 artisanal roads totaling 368 kilometers built in partnership with Indigenous communities. Her administration completed passenger train lines between Mexico City and Toluca and between Mexico City and the Felipe Ángeles International Airport, while constructing various other railroads across the country.
The Isthmus of Tehuantepec's Interoceanic Railroad has transported 2 million tonnes of freight. The government is modernizing hydro-agricultural infrastructure across more than 250,000 hectares, seven ports and 11 international airports, including facilities in Mexico City, Puerto Escondido and Tepic. A desalination plant is planned for Rosarito, Baja California.
Strained but respectful U.S. relations
Turning to foreign policy, Sheinbaum acknowledged that Mexico's relationship with the United States "has had its challenges, but we've made the decision to always seek understanding." She emphasized Mexico's constitutional principles of non-intervention and reiterated her commitment to defending Mexican sovereignty.
"Mexico is a sovereign country and sovereignty isn't negotiated, handed over or shared," Sheinbaum declared, maintaining a respectful relationship with President Trump despite disparaging remarks he has made about her, including claims that she is "afraid" of Mexican cartels.
The president expressed concern about the treatment of Mexicans in U.S. Immigration and Customs Enforcement custody, noting that 17 Mexicans have died in ICE custody or during ICE operations since Trump returned to the White House in January 2025. She pledged to pursue complaints and demand full respect for the human rights of Mexican nationals.
The Trump administration has revoked U.S. visas of at least 50 Mexican politicians and government officials as of October 2025, with a majority being members of the ruling Morena party, as part of a crackdown on suspected cartel links. In August 2026, Andrés Manuel López Beltrán, son of former President López Obrador and former organizational secretary of Morena, announced that the United States had revoked his visa, calling it a politically motivated decision without evidence of wrongdoing.
Additional achievements
Sheinbaum reported that her government has held 475 morning press conferences as "a permanent exercise of information, dialogue, debate and right of reply." She has traveled 84,407 kilometers by air and 20,000 kilometers overland, visiting communities across all 32 states.
Other highlights included progress on the Olinia electric vehicle project entering production phase, the launch of the Coatlicue supercomputer project, and creation of the Bachillerato Nacional nationwide high school program. The government aims to build 1.8 million homes for low-income families by 2030 and has provided 25 billion pesos in direct funding to 19,000 Indigenous and Afro-Mexican communities.
Energy sector goals include adding 32,000 additional megawatts of electricity to the national grid by 2030 and increasing renewable energy's share of generation from 24% to 38%. Pemex's debt has declined by $20 billion during the current administration.
In her closing remarks, Sheinbaum dismissed claims of internal divisions within the Morena party and asserted that "the eyes of the world are on Mexico because here a great people has decided to write their own history." She declared that Mexico "is free and sovereign and is advancing with dignity, with the strength of its people and with our eyes set on a future that stems from our legacy of greatness."