Mexico’s public finances face urgent overhaul as debt risks rise

Private‑sector specialists warned that Mexico must overhaul its public finances to avoid a prolonged low‑growth environment and rising debt burdens. They called for stricter spending discipline, higher revenue, pension reforms and a deep restructuring of state‑oil firm Pemex, which has accumulated losses of about $100 billion since 2019 and spends around $10 billion yearly on refining a limited gasoline output. In 2025 the deficit reached 4.8 % of GDP and pension spending accounted for 6 % of GDP, a share projected to rise to 8 % by 2030. The fiscal strain has already contributed to Moody’s downgrade of Mexico’s sovereign rating to “Baa3” and threatens the country’s investment‑grade status, raising borrowing costs. Analysts also noted that regulatory uncertainty and weakened legal certainty are dampening both domestic and foreign investment, potentially jeopardising the renewal of the US‑Mexico‑Canada trade pact (T‑MEC).