Mexico’s federal public sector debt has increased by 5.2 percentage points as a percentage of GDP since 2019, reaching 15.44 trillion pesos in the first quarter of this year. Despite a period of lower public sector debt contracting in the last five years, during which internal interest rates rose from 8 to 11.25 percent, the increase in debt occurred.
The federal government has not received operating surpluses from the central bank between 2019 and 2023 due to the appreciation of the national currency, unlike previous administrations. The debt of the federal public sector has increased in absolute terms over the last five years, but remains stable and sustainable in the medium term according to the Ministry of Finance. In March of this year, the public sector debt reached 15.44 trillion pesos, equivalent to 45.2 percent of GDP.
The current administration has focused on modifying the debt structure to rely more on internal financing, aiming to reduce exposure to foreign currency fluctuations. Around three-quarters of the federal government’s debt is denominated in pesos, which makes it more susceptible to interest rate changes. Despite the increase in public debt, the Treasury considers the current debt level to be sustainable, with international rating agencies suggesting that debt levels up to 56 percent of GDP are manageable for a country like Mexico.
