CEESP Warns Mexico’s Public Finances Are Under Pressure and Calls for Stability in 2027 Budget

Mexico’s public finances face growing pressure as government spending continues to rise while revenue growth remains almost flat, the Centre for Economic Studies of the Private Sector said in its weekly analysis.

CEESP called for stability in the 2027 Economic Package, warning that the combination of low income and high spending could make government finances difficult to sustain. It said the economy was growing slowly and that the government needed stronger tax revenue to meet expanding public expenditure.

Spending on priority programmes accounts for 42% of the federal government’s total revenue and 45% of tax revenue, according to the centre. It said unconditional cash transfers remain in place because cutting them would be politically costly. Pension and retirement payments will add further pressure, requiring 1.7 trillion pesos, nearly a quarter of programmable spending.

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very costly politically

The figures for the first half of the year showed the imbalance. Total revenue was 141 billion pesos below the amount programmed, while tax revenue fell 53 billion pesos short. Revenue increased just 0.1% year on year in real terms, including a 0.4% rise in tax receipts, while spending grew 2.1%. The resulting public-sector deficit reached 559 billion pesos, up 36% from the same period a year earlier.

CEESP also said stabilisation funds offered limited protection. The FEIP and FEIEF funds together held 150 billion pesos, an amount the centre said would not be enough to rescue the government if needed. Even an expected 1.1% acceleration in growth in 2027 would not be sufficient to improve fiscal resources, it said. The centre added that public-sector financial requirements had reached 19 trillion pesos by the second quarter, 1.3 trillion pesos more than a year earlier.

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If economic growth does not recover, their insufficiency in the future can be anticipated.