Mexico Cuts Government Spending by 5.3% as Oil Revenue Falls and Debt Costs Rise

Mexico’s government spent less money in the first five months of 2025 than it did last year. According to the Ministry of Finance, the government spent 3.72 trillion pesos, which is 5.3% less than in the same period of 2024.

This spending was also 224 billion pesos below what they had planned. Officials say they cut back to keep the budget deficit under control and to make sure the country does not borrow too much.

Even with these cuts, the government still paid for social programs, public services, and infrastructure. However, spending on things that directly help people, like health and education, dropped by nearly 10%.

At the same time, Mexico had to pay more interest on its debt. Debt payments rose by 13%, reaching 460.6 billion pesos. The government said this increase was because of tougher financial conditions both in Mexico and around the world.

Still, they managed to spend less on debt payments than they originally expected. On the positive side, the government collected more taxes. Tax revenue went up by almost 9% compared to last year, reaching 2.41 trillion pesos.

More money came in from sales tax and income tax, and customs brought in 38% more than before. Officials credit better tax collection and a stronger local economy for these gains.

But oil income was a problem. Money from oil dropped by almost a quarter, falling to 375.2 billion pesos. This was well below what the government had hoped for.

The main reason was that Mexico produced less oil than planned—1.69 million barrels per day instead of 1.87 million. Overall, Mexico brought in 3.47 trillion pesos in revenue, which is 3.7% more than last year.

However, this was still 64.5 billion pesos less than the government expected. These numbers show that Mexico is trying to be careful with its money. The government is collecting more taxes and spending less.

It faces challenges due to lower oil income and rising debt payments. For businesses and investors, this means Mexico is working to stay stable and avoid taking on too much debt, even as it deals with tough economic conditions.