Mexico’s debt, or the Historical Balance of the Public Sector’s Financial Requirements (SHRFSP), will reach its highest proportion of the economy in 2027, reaching 55%. This is the highest percentage since 2000, according to records from the Ministry of Finance and Public Credit (SHCP), and is equivalent to 21.8 trillion pesos.
This would be the fourth consecutive year of rising public debt as a proportion of Gross Domestic Product (GDP), as an increase is also projected for the end of this year, reaching 54.7%, after a downward trend from 2021 to 2023. This adjusts the outlook for Mexico’s credit rating. This rating measures the public sector’s capacity to repay its debt, and a deterioration in this rating makes access to financing more expensive and reduces the attractiveness of foreign investment.
The Ministry of Finance presented its projections for public debt at the end of 2026 and 2027 to Congress on April 1st in the document “Preliminary Economic Policy Criteria 2027,” which provides a framework for discussions on the design of next year’s Economic Package.
“It is important to note that the projections are based on a prudent macroeconomic framework, with inertial projections of public finances and no modifications to the current tax framework,” the Ministry, headed by Édgar Amador Zamora, emphasized in the document.
Why will public debt increase? The increase in debt for this year and next is due to the methodological revision of nominal GDP carried out in 2025. This revision modified the previous calculation basis, which directly impacts how the debt balance is expressed as a proportion of the economy, the Ministry of Finance stated in the document.
Also noteworthy are the adjustments to the macroeconomic framework, compared to what was expected last September, mainly due to the war in Iran and its effects on the foreign exchange market and global oil prices; a stronger peso against the dollar; and a higher interest rate for this year, but one that is expected to decline next year. The economic growth outlook remained unchanged, while it has been significantly revised upward for 2027.
Furthermore, the fiscal deficit (higher spending than revenue) is expected to continue in 2026 and 2027, which will continue to put upward pressure on the historical balance. The Ministry of Finance projects reducing this difference from 4.3% of GDP in 2025 to 4.1% this year, and to 3.5% next year, through cuts in public spending. More than 100 billion pesos are projected for this year, compared to the approved budget, and 91 billion pesos for 2027 compared to the 2026 budget.
It is important to consider that the deficit expected by the Ministry of Finance for this year could be higher, “given the conditions of uncertainty and volatility that are affecting the performance of economic activity, as well as the prolonged period of lower revenue from the IEPS (Special Tax on Production and Services) on fuels, which could create pressure by failing to collect the level programmed for the current fiscal year,” noted the rating agency HR Ratings in an analysis.
Source: expansion
