Mexico | Debt servicing costs increase public spending

Summary

Public revenue in 2023 was MXN 84,326 million (0.27% of GDP) below budget due to lower oil-related income as international prices of a crude oil barrel went down.

Key points

• Key points:
• Tax revenue was MXN 102,984 million (0.33% of GDP) below budget since VAT intake was MXN 52,875 million lower as there was an increase of reimbursements and compensations along with MXN appreciation against the USD.
• Despite public revenue being below budget, the performance of total public spending in 2023 allowed the budget deficit to be approximately MXN 54,541 million below budget.
• The continuous containment of Pemex expenditures does not seem to be a sustainable strategy to keep fiscal discipline in a context of higher pressure from social and new infrastructure spending needs that can enhance the nearshoring benefits.

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