Mexico Debt Refinancing Hits MX$1 Trillion in 2025, SHCP Says

The Mexican government refinanced a total of MX$1 trillion (US$56 billion) in 2025 to manage debt servicing costs, according to the 2026 Annual Financing Plan released by the Ministry of Finance and Public Credit (SHCP).

The ministry, led by Édgar Amador Zamora, carried out eight refinancing operations in the domestic market. The total amount exceeds the approved 2025 public investment budget of just over MX$1 trillion and surpasses functional spending on education and health, which totaled MX$1.04 trillion and MX$881.4 billion, respectively.

The SHCP said the operations were designed to take advantage of interest rate cuts by the central bank and to redistribute the maturity profile of the federal government’s debt portfolio.

• Peak Operation: The largest refinancing took place on Jan. 31, 2025, totaling MX$185.6 billion. Demand reached MX$273 billion, extending the average debt maturity by 2.1 years.

• Final Operation: The last refinancing of the year was completed on Oct. 31, 2025, for MX$165 billion.

Regarding debt servicing costs, the government expects to spend MX$1.38 trillion in 2025, a 5.4% increase over the approved budget. By November, debt service payments totaled MX$1.07 trillion, up 11.2% year over year, but still MX$54.8 billion below the programmed amount.

2026 Financing and Focus on the Domestic Market

The 2026 Annual Financing Plan establishes the domestic market as the government’s primary funding source, with a continued preference for peso-denominated debt.

The SHCP outlined several strategic priorities for 2026:

• Fixed Rates: Greater emphasis on fixed-rate, long-term debt placements.

• Sustainable Instruments: Continued development of Bondes G and Bono S to expand sustainable financing.

• Market Liquidity: Support for the Market Makers program for government bonds and Udibonos to deepen local market liquidity.

“In an environment of declining interest rates by central banks, refinancing operations were carried out to contain debt servicing costs and redistribute the maturities of the federal government’s portfolio,” the document stated.

The SHCP is scheduled to publish final public finance results for 2025 at the end of January. Approved borrowing limits for that year included MX$1.5 trillion in domestic debt and US$15.5 billion in external debt. For 2026, the government plans to maintain ongoing dialogue with financial system participants to ensure the stability of the government securities market.

Infrastructure Sacrifice for Fiscal Consolidation

Despite active debt management, physical investment—funding for infrastructure such as railways, bridges and highways—has become the main adjustment variable for deficit reduction. SHCP data shows that between January and November 2025, public investment spending fell to MX$685.3 billion, marking a historic contraction.

Fausto Hernández, economic expert, CIDE, said Minister Amador faces a rigid budget dominated by constitutional obligations, leaving infrastructure as the most accessible area for spending cuts. Earlier in 2025, physical investment declined 29% in real terms, the steepest drop since the 1995 crisis. Ricardo Cantú of CIEP warned that “when the deficit is adjusted, physical investment is usually the first item to be cut,” despite productivity levels already falling below those recorded in 2005.

Economic Outlook and Growth Risks

The pullback in public works, combined with labor market challenges, has contributed to cautious growth projections for 2026. While the federal government forecasts economic growth of between 1.8% and 2.8%, international institutions such as the IMF and the OECD project growth of 1.2% to 1.5%. Banco de México has offered a lower estimate of 1.1%.

To narrow the fiscal gap without pursuing comprehensive tax reform, the government has implemented targeted measures, including:

• Selective tax increases: Higher excise taxes (IEPS) on tobacco and sugary drinks.

• Financial adjustments: Reduced tax deductibility for banks’ contributions to the Institute for the Protection of Bank Savings (IPAB).

• Digital oversight: Stricter tax enforcement for digital commerce and fintech platforms.

The Employers’ Confederation of the Mexican Republic (COPARMEX) said the key challenge for 2026 will be converting macroeconomic stability into productive investment, particularly as Mexico grapples with an informal employment rate of 55% and ongoing security concerns.