Mexico's 2027 Budget Draft Sees Growth Up to 2.5%, Deficit Narrowing

Mexico's finance ministry has submitted its 2027 budget draft to Congress, projecting economic growth between 1.5% and 2.5% for the year. The forecast is underpinned by solid domestic demand, higher household incomes, and easing financial conditions.

The government also expects investment linked to infrastructure projects and tax incentives under the 'Plan Mexico' initiative to support activity, alongside export growth driven by North American trade integration.

The broader public sector deficit is seen narrowing to 3.9% of GDP in 2027, down from the 4.1% projected for 2026. The 2026 growth estimate was revised lower to 1.0%-2.0%, from an earlier range of 1.8%-2.8%.

Public debt, measured by the Historical Balance of Public Sector Borrowing Requirements, is expected to reach 55.0% of GDP in 2027, compared with 54.0% estimated for end-2026. Headline inflation is projected to close 2027 at 3.0%, in line with the central bank's target.

The budget allocates 81.1 billion pesos ($4.80 billion) to state oil firm Pemex for debt repayment in 2027, a sharp cut from 263.5 billion pesos in the prior budget. An additional 255.5 billion pesos is earmarked for Pemex's priority investment projects.

The macroeconomic framework assumes Mexico's crude export mix will average $61.80 per barrel in 2027, down from an estimated $78.40 in 2026. Total liquid hydrocarbon production is projected at 1.80 million barrels per day.