Mexico Election Watch – AMLO fears recede

Left-wing populist Andrés Manuel López Obrador (AMLO) appears to have made headway in allaying investors’ fears of a dramatic shift in policy if he wins Mexico’s presidential election in July. But some of his proposals, particularly on the fiscal side, don’t quite stack up. And while looser fiscal policy – as seems likely – would boost growth in the near term, it could create medium-term vulnerabilities.