Mexico's Bold Budget Moves: A Strategy for Growth

Mexico's budget for 2026 anticipates a slight deficit drop to 4.10% as GDP growth improves. The plan balances boosting social programs and supporting Pemex with fiscal responsibility. Key forecasts include inflation meeting targets and interest rates decreasing. Debates in Congress are expected to follow.

In its budget presentation, Mexico forecasts a slight deficit reduction in 2026, with expected GDP growth contributing to this change. The government aims to address fiscal pressures while maintaining its commitment to social programs and supporting Pemex, a state-owned oil firm facing significant debt.

Finance Minister Edgar Amador emphasized the challenges and opportunities presented by the international environment, pledging to leverage economic prospects. The government projects the economy to grow between 1.8% and 2.8%, outperforming forecasts by the IMF and Bank of Mexico.

The proposal also outlines a strategy to control inflation and relax monetary policy, with interest rates expected to drop. Additionally, Mexico plans to review its 'General Import Tax' and introduce new taxes to discourage unhealthy consumption. The budget now awaits congressional scrutiny, where the ruling party holds a majority.

(With inputs from agencies.)