Mexico and Paraguay face fiscal reform challenges and growing deficits

Mexico is urged to enact a comprehensive fiscal reform to stop the yearly erosion of public budgets, raise public investment to just 2.5% of GDP and address costly legacy projects such as the AIFA airport, the Tren Maya, the Interoceánico rail line and the Dos Bocas refinery, while state utilities Pemex and CFE continue to drain finances.

In Paraguay, the public pension fund known as the Caja Fiscal posted a red balance of 1.31 billion guaraníes (about US$216 million) in the first half of 2025, with contributions of 1.83 billion guaraníes offset by payouts of 3.15 billion. The resulting 42 % deficit, equivalent to roughly US$1.2 million per day, has widened by 7 % in local currency and 41 % in dollars, highlighting the limited impact of the recent pension reform legislation.