Mexico’s 2027 Budget Loosens Its Deficit Goal as Debt Keeps Rising
Key Facts
Mexico is trying to narrow its budget deficit while growth slows and its trade pact with the United States faces yearly reviews. The 2027 budget delivered on 8 September narrows it more slowly than promised in April.
Finance Secretary Édgar Amador Zamora handed the 2027 economic package to the Chamber of Deputies, Congress’s lower house, on 8 September. It sets a broad deficit of 3.9% of GDP, looser than the 3.5% his ministry had signalled in April.
Why This Matters
Mexico has about 134 million people and, by World Bank figures, the second-largest national income in Latin America after Brazil. Claudia Sheinbaum, Mexico’s first woman president, took office on 1 October 2024 and pledged responsible fiscal policies.
Her allies hold a legislative supermajority, so the question is less whether the budget passes than what it promises. Two of the three big rating agencies have already moved on Mexico this year, and that is the backdrop to every number.
Trade is the other backdrop, and the North American pact, USMCA, reached its first six-year review on 1 July 2026. The Trump administration declined to renew it and chose yearly reviews instead, CNBC reported.
The pact stays in force for another decade unless a member withdraws, but the reviews could reopen major parts of it. Pemex, the heavily indebted state oil company, is the third pressure on the budget.
The package gives Pemex 81.1 billion pesos (US$4.8 billion) for debt payments, Reuters reported. The prior budget had set aside 263.5 billion pesos (US$15.6 billion) for the same purpose.
The Deficit, and Which Deficit
The package sets public sector borrowing requirements, the broadest deficit measure, at 3.9% of GDP for 2027. For 2026 the same measure is estimated at 4.1%, so the package narrows the gap by two tenths of a point.
In April, the ministry’s own pre-budget guidance pointed to 3.5% for 2027. The delivered package abandons that target.
Anyone still quoting 3.5% is quoting the April document, not the budget. The difference is four tenths of a point of Mexican GDP.
There is a second number, and it is not the same one: the traditional budget balance is 3.4% of GDP. That narrower figure is what Congress actually votes on.
The gap between the two covers obligations of the state power company and pension liabilities. This article uses the broad measure unless it says otherwise.
Debt Goes Up, Not Sideways
The broad debt measure is projected at 55.0% of GDP in 2027, up from an estimated 54.0% this year. That is a rise of a full percentage point, so headlines describing debt as stable have the direction wrong.
The ministry frames the package as fiscal consolidation, meaning a gradual tightening of the public finances. Both things are true at once, because the deficit narrows while the stock of debt still grows.
Growth, Oil and the Peso
The growth forecast for 2027 is a range of 1.5% to 2.5%, and revenue estimates use a point estimate of 2.0%. That range was cut from the 1.9% to 2.9% published in April.
The 2026 range was also revised down, to 1.0% to 2.0%. The ministry expects growth from domestic demand, infrastructure investment and exports tied to North American trade, Reuters reported.
The oil price assumption is US$61.80 a barrel for the Mexican export mix, well below the roughly US$78 estimated for 2026. Production is assumed at 1.80 million barrels a day of liquid hydrocarbons.
The macroeconomic frame assumes 18.0 pesos to the US dollar at the end of 2027. The peso traded at 16.9120 on 8 September 2026, the reference rate of Banxico, Mexico’s central bank.
Those are two different concepts, and they should not be read as a forecast of decline in the coming weeks. All conversions in this article use that 16.9120 rate.
Spending Is a Record Only in Nominal Terms
Total net spending is set at 10,636,488.1 million pesos (US$629 billion). The figure approved for 2026 was 10,193 billion pesos (US$603 billion), so the increase is about 4.3%.
Inflation is assumed at 3.0%, so the real increase is closer to 0.7%. Calling it a record is accurate in nominal pesos only.
One outlet reports net spending as 10,515.1 billion pesos (US$622 billion). That is a narrower measure, and we use the larger figure.
No New Taxes, Whatever You Read Last Week
The package creates no new taxes and no increase in excise duties on sugary drinks, tobacco or videogames. Its revenue strategy is enforcement, starting with tighter income tax rules against aggressive deductions.
It also targets invoice mills, companies that sell fake invoices so others can dodge tax. It extends fuel traceability rules aimed at fuel theft and tax fraud in the fuel chain.
Proposals circulating in the first week of September were legislators’ ideas ahead of the package. Several outlets reported them as if they were in it.
Those included raising the snack food levy from 8% to 20% and a new duty on instant soups. None of that is in the delivered documents.
Plan México, and What Its Headline Figure Covers
The package restates Plan México, the government’s infrastructure and industrial programme. It directs 5.7 trillion pesos (US$337 billion) to water, energy and transport, spread over 2026 to 2030.
Physical investment for 2027 alone is 2.6% of GDP. The important qualifier is often dropped: the 5.7 trillion pesos (US$337 billion) cover public and private investment together, not government money alone.
Two Things Happening Alongside
US Commerce Secretary Howard Lutnick was due in Mexico City on 9 September to meet President Sheinbaum. Economy Minister Marcelo Ebrard announced the visit, and the subjects are US tariffs on cars, steel and aluminium.
It is not a formal round of the North American trade agreement review. No account of the meeting had been published as this was written.
Separately, a committee of the Chamber of Deputies approved a constitutional change on 8 September by 26 votes to 5. It would bar dual nationals from the presidency, a state governorship or the mayoralty of Mexico City from the 2028 elections.
What It Means If You Invest In or Trade With Mexico
For bondholders, the looser deficit target matters more than the record spending headline. It signals that consolidation will be slower than the ministry promised only five months ago.
For companies, no new taxes means the revenue push falls on enforcement against deduction abuse and fake invoicing. For exporters, the budget counts on North American trade just as that trade faces yearly US reviews.
What Is Not Yet Known
It is not known how Congress will amend the package before approving it. It is not yet known how rating agencies will read the looser deficit target.
It is unclear whether Mexican oil will average the assumed US$61.80 a barrel in 2027. The outcome of the Lutnick visit on tariffs is also unknown.
Frequently Asked Questions
Why does Mexico’s 2027 budget matter?
It shows how fast Mexico will cut a deficit estimated at 4.1% of GDP this year. The answer, 3.9% for 2027, is slower than the 3.5% the ministry promised in April.
Are there new taxes in the package?
No. It creates no new taxes and no excise increases on food, drink or tobacco, relying instead on tighter enforcement against evasion.
How much does the government plan to spend?
Total net spending is 10,636,488.1 million pesos (US$629 billion). That is a nominal record but only about 0.7% higher in real terms.
Does Mexico’s debt keep rising?
Yes. The broad debt measure rises from an estimated 54.0% of GDP this year to 55.0% in 2027.
Sources: Reuters, the growth, deficit, oil and Pemex projections, El Financiero, the 3.9% figure, Excélsior, the growth range, El Cronista, the spending increase, Excélsior, no new taxes in the package, El Heraldo de México, Plan México infrastructure, El Sol de México, the delivery to Congress, Infobae, the dual nationality committee vote, CNBC, the US declines to renew USMCA, Wikipedia, Mexico population and national income, Wikipedia, Claudia Sheinbaum, Wikipedia, Pemex debt
This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief
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