Mexico expects its budget deficit to ease slightly in 2026 to 4.1% of GDP, down from a projected 4.32% in 2025, the Finance Ministry said during its budget presentation last week. The government faces pressure to shrink the gap while maintaining social spending and supporting state oil company Pemex.
“Although the international environment still presents risks from uncertainty and trade tensions, it also opens opportunities we must seize,” Finance Minister Edgar Amador said Monday.
The government forecasts growth of 1.8% to 2.8% in 2026, well above the IMF’s 1.4% projection and the Bank of Mexico’s 1.1% forecast. Inflation is seen at 3% by the end of 2026, in line with the central bank’s target.
Easing inflation is expected to allow further rate cuts. The ministry projects the Bank of Mexico’s benchmark rate will fall to 7.25% in 2025 and decline to 6% in 2026. Last month, the bank cut rates by 25 basis points to 7.75%, its lowest level in three years.
Pemex will receive 263.5 billion pesos ($14.1 billion) in 2026 to cover debt obligations, the draft budget showed.
The proposal also hinted at possible tariff changes after President Claudia Sheinbaum said Mexico may impose duties on countries without trade agreements, including China. Details were not provided.
In addition, new “healthy taxes” would raise levies on soft drinks, video games, and nicotine pouches. The budget plan now moves to Congress, where Sheinbaum’s party holds strong majorities in both chambers.
