(Reuters] Mexico’s economic growth is at risk and there are potential credit ratings downgrades due to political developments, including likely passage of a controversial bill on energy. JP Morgan stated in a report that Mexico has been warned about these risks.

According to the bank, President Andrés Manuel López Obrador’s plan to tighten state control of the electricity market could trigger sovereign debt rating downgrades from Moody’s (NYSE:) and Standard & Poor’s. During meetings with Mexican officials, Jennifer Granholm, U.S. Energy secretary raised concern over the potential risk to investors that the initiative would pose for the energy market.

JP Morgan’s Thursday report stated that even though the bill had been reduced in detail, it would likely pass some time this year. Lopez Obrador’s opposition could be split by the support of the PRI party, which would allow it to pass.

Gabriel Lozano, a JP Morgan economist wrote that Lopez Obrador’s bill approval would allow him to strengthen the presidency while undermining the role of independent institutions or regulators.

Lopez Obrador’s bill passage is expected to be a catalyst for Lopez Obrador’s gubernatorial victory for the Morena party, Lozano stated.

He expects that the Mexico Central Bank will increase interest rates by 7.25% in 2018 and 8% 2023, up from 5.5% currently.

“If there are some doubts on whether Banxico (Mexico Central Bank) should follow the Fed throughout 2023 or not, this year’s political events will probably dictate the extent of the coupling, ” the bank said.