Mexico’s Public Debt Hits Record US$1.11 Trillion, 51% of GDP
Mexico’s public debt has climbed past MX$19 trillion for the first time, reaching MX$19.05 trillion — about US$1.11 trillion at the current exchange rate — or 51% of GDP, even as Banco de México is expected to leave its benchmark rate at 6.50% with inflation running at 3.10%.
A Record Public Debt Stock — and What It Is Worth in Dollars
Mexico’s public debt, measured by the Historic Balance of Public Sector Borrowing Requirements (SHRFSP) — the broadest gauge the Finance Ministry publishes — stood at MX$19,047,700 million, or MX$19.05 trillion, at the end of June 2026. Converted at the 17.23 pesos per US dollar the currency was trading at this week, that is about US$1.11 trillion.
The figure appears in the quarterly Reports on the Economic Situation, Public Finances and Public Debt for the second quarter of 2026, released by the Secretaría de Hacienda y Crédito Público (SHCP) on 30 July. It is the first time the stock has cleared the MX$19 trillion mark.
A year earlier the same measure stood at MX$17.80 trillion (about US$1.03 trillion at today’s rate), so the stock has grown roughly 7% in nominal peso terms over twelve months. A separate reading published in the same package, total net public sector debt, was reported at about MX$19.59 trillion, or roughly US$1.14 trillion.
Fifty-One Percent of GDP, and Still Climbing
As a share of the economy, the stock equals 51% of GDP. That is up from 49.5% at the same point in 2025 and 50.4% at the end of the first quarter of 2026. Hacienda said the reading came in 1.6 percentage points below its own projection for the period and called the level moderate compared with other Latin American economies.
The ministry does not expect the ratio to stop there. Its own figures show the stock could grow by roughly another MX$1 trillion (about US$58 billion) between July and December, taking public debt to 52.3% of GDP at the close of 2026.
Working backwards from the ratio, 51% of GDP implies a nominal economy of roughly MX$37.3 trillion, or about US$2.17 trillion — Latin America’s second largest after Brazil.
What Hacienda Says
Finance Minister Édgar Amador Zamora said Mexico maintains a solid fiscal position and that the debt level remains within sustainable parameters. The ministry stressed that Mexico retains investment grade from all eight agencies that rate its sovereign debt and continues to enjoy favourable access to funding markets.
The quarterly report also carried better-than-programmed fiscal balances. The budget deficit came in MX$358 billion (about US$20.8 billion) below plan in the first half, while the primary balance recorded a surplus of MX$115 billion (about US$6.7 billion).
The financial cost of the debt — essentially interest payments — fell 4.8% in real annual terms over the six months. Hacienda credited the move in the exchange rate, which cuts the peso value of foreign-currency liabilities, and a federal refinancing strategy that lengthened the maturity profile and generated savings of MX$111 billion (about US$6.4 billion).
Revenue was the weak spot. Public income advanced just 0.1% year on year. Tax collection rose 0.4%, with value-added tax receipts jumping 10.6% while income tax, which tracks the formal economy more closely, fell 6.2%. Net budget spending rose 2.1% to MX$4.85 trillion (about US$281.5 billion).
Why the Exchange Rate Moves the Headline
Because a slice of the stock is issued in foreign currency, the headline peso number moves with the exchange rate as well as with new borrowing. A stronger peso shrinks the peso value of dollar-denominated debt; a weaker peso inflates it, even in a month when no new paper is sold. That is part of why Hacienda’s financial cost line fell in real terms.
The same mechanism works in reverse for readers converting into dollars, and it matters more than usual right now. The peso has firmed sharply over the past year: it closed at 17.23 per US dollar in the latest Mexico City session. At the roughly 19 pesos per dollar the currency traded at through much of 2025, the identical MX$19.05 trillion stock would convert to under US$1.00 trillion. Same debt, a US$100 billion-plus difference in the dollar headline — which is why the rate used for any conversion needs to be stated.
Banxico Seen on Hold at 6.50%
Banco de México announces its next policy decision at 13:00 Mexico City time on Thursday, 6 August, the fifth of eight scheduled announcements in 2026. The consensus among analysts is that the Governing Board will leave the overnight target rate unchanged at 6.50%.
The bank closed its easing cycle in May, when it cut to 6.50%, and then held at its 25 June meeting. Minutes from the August decision are due on 20 August, with the quarterly report covering the second quarter following on 27 August. Brazil’s Copom decision lands in the same week, making it a heavy stretch for Latin American rates.
Inflation Near Target at 3.10%
INEGI put annual headline inflation at 3.10% in the first half of July 2026 — the lowest reading since 2020 and comfortably inside Banxico’s 3% target with its one-percentage-point tolerance band. Full-month June inflation was 3.37%.
The detail is less uniformly friendly. Core inflation, which strips out volatile items, ran at 3.95% year on year in the same fortnight, while the non-core index rose just 0.21%. Services inflation at 4.36% remains the stickiest component and the one the Governing Board has repeatedly flagged.
The Ratings Squeeze
A record debt stock lands on a sovereign already under review. Moody’s cut Mexico to Baa3 from Baa2 on 20 May 2026, the last rung of investment grade, while moving the outlook to stable. Eight days earlier S&P affirmed its BBB foreign-currency rating but revised the outlook to negative, citing slow fiscal consolidation and weak growth.
Fitch affirmed Mexico at BBB- with a stable outlook on 10 April 2026 and delivered the sharpest verdict on the cause: Pemex’s liabilities effectively cost the sovereign a full notch. Mexico has committed roughly US$7 billion a year in budget support to the state oil company, and Fitch has warned the figure may have to rise.
How Mexico Compares in Latin America
Hacienda’s claim that 51% is moderate for the region broadly holds. Brazil, Argentina and Colombia all carry heavier debt loads relative to the size of their economies; Brazil’s federal debt alone passed US$1.82 trillion in June. Chile and Peru sit lower, and Fitch has told Chile that debt above 45% of GDP would risk a downgrade.
The comparison cuts both ways. Mexico’s ratio is unremarkable in absolute terms, but its revenue base is thin — tax take is among the lowest in the OECD — which leaves less room to absorb a rising interest bill than the headline percentage suggests.
What Investors Are Watching
Three things. First, whether the ratio lands near Hacienda’s 52.3% year-end projection or overshoots it, which depends heavily on nominal growth in the second half. Second, whether revenue stabilises after a first half in which income tax fell 6.2% and public income was effectively flat.
Third, Pemex. The state oil company is the single line item that the rating agencies keep returning to, and the one most likely to force the debt trajectory higher than plan.
For now, near-target inflation and a steady policy rate coexist with a record debt stock — a combination that keeps fiscal discipline, rather than monetary policy, at the centre of the Mexico trade.
Sources
Secretaría de Hacienda y Crédito Público (SHCP) · Banco de México · INEGI
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Frequently Asked Questions
How big is Mexico’s public debt in US dollars?
Mexico’s broadest debt measure, the historic balance of public sector borrowing requirements, reached MX$19.05 trillion at the end of June 2026. Converted at the 17.23 pesos per dollar quoted in the 6 August session, that is about US$1.11 trillion. A separate net public sector debt reading was reported near MX$19.59 trillion, or roughly US$1.14 trillion.
What is Mexico’s debt-to-GDP ratio in 2026?
Public debt equalled 51% of gross domestic product at the end of June 2026, up from 49.5% a year earlier and 50.4% in the first quarter. The Finance Ministry says the reading came in 1.6 percentage points below its own forecast for the period, and projects the ratio will finish 2026 at 52.3%.
How does Mexico’s debt compare with the rest of Latin America?
At 51% of GDP, Mexico sits below the regional average and well under Brazil, whose federal debt alone passed US$1.82 trillion in June. Hacienda calls the level moderate by Latin American standards. Chile and Peru carry lighter burdens, and Fitch has warned Chile that crossing 45% of GDP would put its rating at risk.
What does record debt mean for investors and Mexico’s credit rating?
Mexico still holds investment grade at all eight agencies that rate its sovereign debt, but the margin is thin. Moody’s cut Mexico to Baa3 in May 2026, S&P affirmed BBB while moving its outlook to negative, and Fitch says Pemex’s liabilities cost the sovereign a full notch at BBB-. Fiscal discipline now drives the spread.
Sources: Secretaría de Hacienda y Crédito Público, La Jornada – SHCP second-quarter 2026 debt report, INEGI – INPC, first half of July 2026, Banco de México
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