President Claudia Sheinbaum's first year in office has brought a combination of political stability, expansive social policies and cautious diplomacy, all set against the backdrop of a slowing economy and growing institutional concentration. As Mexico's first woman head of state, Sheinbaum has inherited the political machinery of her predecessor Andrés Manuel López Obrador while seeking to shape her own approach to governance.

Official data and media reports depict a government intent on demonstrating continuity with the so-called Fourth Transformation, or 4T, but now starting to face limits to its flagship economic and political model. El Financiero reported that Sheinbaum entered her second year with a 73% approval rating, five points above López Obrador’s figure at the same stage, driven by social spending and welfare expansion. However, fiscal and structural pressures are beginning to surface.

According to AFP, government investment in social programmes reached about $54.3bn in 2025, equivalent to 12% of the national budget. These resources funded pensions, scholarships and direct aid to over 20mn beneficiaries, including farmers, students and retirees. The same report noted that such spending has coincided with widening fiscal deficits, which Valmex economist Gerónimo Ugarte attributed to increased debt servicing and persistent low growth. The Bank of Mexico forecasts a GDP expansion of just 0.5% for 2025 and up to 1.4% in 2026, underscoring the fragility of the recovery.

On the diplomatic front, Sheinbaum has sought to project moderation and cool-headed pragmatism. In a documentary marking her first year, she stressed that her administration had achieved “a reasonable agreement” with the United States over tariff disputes under President Donald Trump, avoiding massive economic disruptions while “defending national sovereignty”. That negotiation, which secured continued access to the US market, is seen as vital given that over 80% of Mexican exports are destined for the United States. Speaking at a rally in Mexico City, Sheinbaum said she was “confident of reaching good trade agreements” not only with the US but also within the broader North American framework (USMCA).

Domestically, her administration has overseen improvements in security and social welfare indicators. El Financiero reported a 32% reduction in homicides and a significant decrease in fentanyl trafficking towards the United States, attributed to strengthened border enforcement and the deployment of 10,000 National Guard troops in cooperation with Washington. At the same time, Sheinbaum’s team claims to have reduced poverty from 45% in 2008 to 29% in 2025, a figure echoed in El Economista’s coverage of her first annual report.

Infrastructure and industrial policy have also featured prominently. During her first 100 days, Sheinbaum launched “Plan México”, described as a joint initiative between government and private investors to expand the country’s productive capacity. The scheme aims to keep investment above 25% of GDP, add 1.5mn jobs in the manufacturing and energy sectors and position Mexico among the world’s ten largest economies by 2026. Complementing this, El Financiero detailed a 10-year strategic plan for state-owned oil company Petróleos Mexicanos (Pemex) designed to address the firm’s nearly $100bn debt and boost production. Energy Secretary Luz Elena González outlined 11 measures targeting both financial restructuring and operational efficiency.

Despite these ambitious initiatives, though, structural vulnerabilities remain visible. Declining remittance inflows—five consecutive months of contraction as of August, according to AFP—have hit domestic consumption. Meanwhile, corruption allegations involving figures close to Sheinbaum, including former interior minister Adán Augusto López Hernández and his alleged links to organised crime, have tested the administration’s claims of ethical renewal. El Economista noted that these scandals, coupled with visible signs of opulence among some senior officials, have begun to erode the government’s moral narrative of austerity and “just middle living”.

In political terms, Sheinbaum’s communications strategy, particularly her daily press briefings, has become a central mechanism for framing national discourse. Critics warn that this narrative control limits pluralism and marginalises opposition parties such as the PAN and PRI. While not overtly repressive, the administration’s approach reflects a subtle consolidation of influence through media dominance and social policy dependence, traits described by analysts as indicative of a “soft authoritarian” style.

Still, Sheinbaum’s popularity remains remarkably high, supported by tangible welfare gains and the perception of a government more attentive to the working majority than its predecessors. As she told supporters at the Zócalo, her leadership seeks to promote “justice, dignity and sovereignty” after what she termed “decades of neoliberal decline”. Yet when such centralised systems confront fiscal or political limits, they risk reverting to more coercive tendencies rather than broadening democratic participation.

After one year, Sheinbaum’s cabinet appears both steady and constrained: socially expansive, diplomatically cautious and politically cohesive, but increasingly reliant on centralised authority to sustain legitimacy. Whether this balance will hold amid economic headwinds, geopolitical tensions and institutional strain remains uncertain.