Finance Ministry Defends Fiscal Consolidation: Increased Revenue, Social Investment, and No New Taxes
The Ministry of Finance and Public Credit (SHCP) told the Senate that the expansion of social programs and the boost in public investment during the first year of Claudia Sheinbaum’s administration have been possible without resorting to a tax reform. The head of the agency, Édgar Amador Zamora, attributed this performance to improved tax collection efficiency and actions taken against tax evasion, while ruling out any cuts to sensitive areas such as healthcare, education, and social housing.
According to the official, strengthening customs controls—with technological, logistical, legal, and operational infrastructure—has increased revenues from foreign trade by more than 22% in real terms. Between January and August, tax revenue exceeded scheduled targets by 88.7 billion pesos, while spending was 322 billion pesos below the projected calendar, reflecting an adjustment in the pace of expenditures without affecting social priorities, according to Finance.
The Ministry projects the public deficit to close 2025 at 4.3% of GDP and debt at around 52.3% of GDP—levels considered compatible with fiscal sustainability. In terms of debt management, the agency highlighted the issuance of benchmark bonds maturing in 2032 and 2038 totaling $6.79 billion and the early repayment of two issuances due in 2026 for $3.59 billion, as part of a strategy to smooth the amortization profile and capitalize on favorable market windows.
This emphasis on collection efficiency follows a 2024 marked by countercyclical spending and a historically high deficit, which is now transitioning toward gradual consolidation. In this context, Mexico maintains its investment grade rating from the major agencies, supported by a prudent macroeconomic framework, a central bank with a restrictive stance, and a solid external sector. Nonetheless, risks remain: global slowdown could curb VAT and income tax revenues, pension pressures keep rising, and Pemex continues to represent a significant contingent liability due to its high debt and investment needs.
On the real economy front, the investment momentum linked to nearshoring and manufacturing relocation remains a key support for medium-term growth, especially in the northern and Bajío regions. To maximize its impact, public spending on infrastructure—especially logistics and energy infrastructure such as power grids, transmission lines, and ports—will be crucial to alleviate bottlenecks and anchor private projects. At the same time, the peso’s performance and inflation trends will continue to influence the pace of monetary easing by the central bank, with consequences for both public and private sector financing costs.
Looking ahead, maintaining social spending without new taxes will rely on consolidating the tax base, intensifying the fight against evasion, and carefully balancing public investment. The budget process and its execution in 2025 will be key to confirming the path of consolidation and preserving market confidence, while also addressing gaps in public services and competitiveness.
In summary, the Finance Ministry is betting on fiscal consolidation supported by higher tax collection efficiency and more selective spending, while safeguarding social priorities. The challenge will be to sustain this trajectory amid an uncertain external environment, with Pemex’s finances under close watch and a pressing need to accelerate strategic infrastructure to fully capitalize on nearshoring.
