Mexico pension spending projected to reach 6.3% of GDP

Mexico is experiencing an accelerated demographic shift toward an aging population, which is projected to significantly increase public pension spending. According to calculations by the Centro de Investigación Económica y Presupuestaria (CIEP), pension expenditures are expected to reach 2.5 trillion pesos by 2027, representing 6.3% of the country's GDP.

Data from the 2025 Intercensal Survey by INEGI shows that the median age in Mexico rose from 29 to 32 years between 2020 and 2025. During this same period, the proportion of the population identified as retired or receiving a pension increased from 8.2% to 10.9%. This structural change is placing pressure on public finances, as approximately 80% of the federal budget is already tied to mandatory spending, leaving a narrow fiscal margin for health, education, and infrastructure.

The industrial sector, represented by the Unión Industrial del Estado de México (UNIDEM), has expressed concern regarding the implications for tax collection, healthcare demand, and public debt. While the economically active population grew from 55.9 million to 61.3 million between 2020 and 2025, the rapid aging of the population poses long-term challenges for the sustainability of social security institutions like IMSS and ISSSTE.