Lower Debt Financing Costs Save Mexico’s Government 159 Billion Pesos

Mexico federal government debt financing costs, Digi Mart USA News (Mexico): Lower financing costs on public debt allowed Mexico’s federal government to save 159 billion pesos compared with projections for the first nine months of 2026. The decline, a real drop of 3.7 percent, helped improve the fiscal balance, according to the Private Sector Economic Studies Center (CEESP).

In its weekly analysis, the business-sector organization identified this result as one of the favorable aspects of public spending, amid lower budget revenues and efforts to achieve fiscal consolidation. CEESP stated that “the favorable part of spending is the real decline of 3.7 percent in financing costs during the period,” and noted that the outlay was also “159 billion pesos below what was programmed, which contributed to the better performance of the fiscal balance.”

The organization said that from January through September, total budget spending registered a real contraction of 0.4 percent, while programmable spending fell 0.3 percent. Within the latter category, cuts of 13.2 percent to autonomous agencies and 8 percent to administrative ministries stood out.

By contrast, physical investment rose 8 percent in real terms and social development spending grew 7.4 percent, according to Treasury Department figures cited by the organization.

CEESP warned, however, that the reduction in financing costs does not eliminate the challenges facing public finances. Budget revenues fell 2.8 percent in real terms during the period, mainly due to a 21.5 percent decline in oil revenues, while tax revenues advanced only 0.7 percent.

The organization also noted that total net debt rose from 53.6 percent of gross domestic product (GDP) at the end of 2025 to 54 percent in September of this year. In this context, CEESP said that “efficient allocation of spending is, as has been noted in this space, indispensable to stimulate economic growth and household welfare.”

It further warned that low tax revenue growth will reduce fiscal room and could limit resources available for public investment. For that reason, it called for a deep rationalization of spending to make it more efficient and avoid further cuts to investment.