Mexico is on the brink of making history by electing its first female president in June, with both leading candidates being women. However, regardless of who wins, the next president will likely face significant constraints due to the financial legacy left by outgoing President Andrés Manuel López Obrador.

During the final months of his term, López Obrador has continued to push forward new, costly projects, leaving behind a slew of unfinished endeavors. This scenario is expected to limit the autonomy of his successor for much of her six-year term, regardless of whether opposition candidate Xóchitl Gálvez or López Obrador's party nominee, former Mexico City mayor Claudia Sheinbaum, emerges victorious in the polls. A third male candidate from a smaller party is considered unlikely to win.

Moody’s Analytics Director Alfredo Coutiño remarked, "The next administration will inherit a country with a financial hole that will limit the maneuvering room throughout the next term." He further noted that fiscal adjustments may be necessary by 2025 to address the current fiscal vulnerability.

One of López Obrador's last-minute promises includes the reintroduction of passenger trains in Mexico, potentially entailing significant government investment in purchasing trains, station refurbishments, and ticket-selling infrastructure. Additionally, the launch of a state-owned airline and the guarantee of full-pay retirement for workers signal further financial commitments that could strain the budget.

Despite assurances from Sheinbaum that she will continue López Obrador's programs while introducing her own, recent downgrades by Moody’s on the debt of the national oil company, Petroleos Mexicanos (Pemex), suggest looming fiscal challenges. These downgrades are attributed to projected deterioration in fiscal conditions, driven by increased deficits, social spending, and high borrowing costs.

The incoming president will also face the daunting task of completing costly infrastructure projects initiated by López Obrador, including an oil refinery and a railway network. Many of these projects are far from completion, despite López Obrador's initial promises to finish them through government cost-cutting and corruption reduction efforts.

As Mexico prepares for its historic election, the next president, whether she be Gálvez or Sheinbaum, will inherit a complex financial landscape that will undoubtedly shape the trajectory of her administration.