Mexico | Public debt could reach 60% of GDP in 2030

A fiscal consolidation that would imply a public deficit of 3.0% of GDP (-3.5% of PSBR) is expected for next year, which would occur with a primary surplus and financial cost of 0.4% and 3.4% of GDP, respectively.

Key points

• Key points:
• Under the assumptions of meeting this target and economic growth of 1.8% in 2025, our own estimations show that the HBPSBR would be 51.2% of GDP for the end of next year vs. 50.8% in 2024.
• If the federal government made a bigger effort of fiscal consolidation to increase the primary surplus to 0.8% of GDP, the HBPSBR would remain 50.8% of GDP by the end of 2025.
• Alternatively, without a bigger effort of fiscal restriction, the Mexican economy would have to grow 2.6% in 2025 to keep the widest concept of public debt at 50.8% of GDP.
• What could happen to the public debt level in the years 2026-2030? If it was only possible to lower the public deficit to levels of 3.2% of GDP in 2026-2029, the HBPSBR would regain its increasing path to reach 57.2% of GDP in 2029.
• Given that 2030 is a year of presidential elections, there is a risk that the public deficit and the HBPSBR reach levels of 4.0% and 59.3% of GDP, respectively.

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