Fiscal Consolidation to Reduce Mexico’s Deficit from 5.9% of GDP in 2025 to 3.5%
The International Monetary Fund (IMF) projects that Mexico will achieve the government’s goal of reducing the public deficit to 3.5% of GDP by 2025, down from 5.9% by the end of this year.
According to IMF experts, the incoming government’s fiscal consolidation strategy will gradually reduce the deficit to 2.7% of GDP starting in 2026 and maintain that level through 2029.
The deficit projected for the last year of Andrés Manuel López Obrador’s presidency, at 5.9% of GDP, represents the widest fiscal gap in a decade. This figure surpasses even the pandemic period when most countries employed expansionary policies, as recommended by the IMF to stimulate the global economy. In fact, Mexico’s deficit reached 4.3% of GDP in 2020, contrasting sharply with the global average of 8.7% during that time.
The IMF’s report indicates that Mexico’s total government debt will be approximately 57.7% of GDP this year, reflecting an increase of 4.6 percentage points in just one year. In 2023, the total debt stood at 53.1% of GDP.
The IMF estimates that this level of debt will fluctuate around 57% of GDP from 2025 to 2028, before rising again to 58.1% of GDP by 2029.
In this fiscal metric, Mexico fares relatively better than many of its emerging market peers, where the average debt level is approximately 70.8% of GDP.
This fiscal overview highlights the challenges and commitments the Mexican government faces as it navigates economic pressures and prepares for a transition in leadership while striving for greater financial stability.
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