Mexico City - Mexico is on the brink of a historic moment as it gears up for its upcoming presidential elections in June, where the likelihood of electing its first female president is high, with both leading contenders being women. However, regardless of the outcome, the new president will likely find her hands tied when it comes to implementing independent policies, given the extensive commitments and projects initiated by outgoing President Andrés Manuel López Obrador.

López Obrador, a populist leader, has been active in proposing ambitious and costly projects even as his term draws to a close, leaving significant endeavors unfinished. This scenario is expected to constrain the options available to his successor throughout the upcoming six-year term. Claudia Sheinbaum, the former mayor of Mexico City and the candidate for López Obrador's party, currently holds the lead in polls, while the opposition candidate, Xóchitl Gálvez, faces significant financial challenges if elected.

Moody's Analytics Director Alfredo Coutiño points out that the incoming administration will inherit a country with substantial fiscal constraints, necessitating fiscal adjustments by 2025 to address the current fiscal vulnerability.

López Obrador's last-minute initiatives include plans to expropriate U.S.-owned Vulcan Materials, potentially incurring significant costs if legal disputes arise. Additionally, promises to reintroduce passenger trains and establish a state-owned airline present further financial burdens.

Despite Sheinbaum's pledge to continue López Obrador's programs and introduce new initiatives, Moody's recent downgrade of the national oil company, Petroleos Mexicanos (Pemex), reflects ongoing fiscal challenges. This downgrade, attributed to projected deterioration in government fiscal conditions, underscores the financial hurdles ahead.

The incoming president faces the daunting task of completing ongoing projects, such as the construction of an oil refinery and a major railway, both plagued by delays and cost overruns. López Obrador's ambitious infrastructure plans, including the Maya Train project, have raised concerns about their economic viability and profitability.

While López Obrador defends his spending decisions, citing lower debt levels compared to his predecessors, concerns persist about Mexico's rising debt-to-GDP ratio and limited access to low-cost borrowing.

Historically, outgoing presidents in Mexico have influenced the agendas of their successors, with López Obrador's debt accumulation likely shaping the priorities of the next administration.

Despite the significance of the upcoming elections, challenges remain, including López Obrador's controversial rhetoric and erosion of democratic norms. While his policies have reduced poverty, concerns linger about the politicization of social programs and persistent security issues.

Mexico's upcoming elections mark a significant change in its political landscape, with the prospect of electing its first female president overshadowed by the fiscal challenges and policy legacies inherited from the current administration.