Mexico’s Public Spending Drops 3.7% YoY, Revenues Increase

Mexico's federal government reduced public spending during the first four months of 2025,  marking a 3.7% year-over-year decline, according to data from the Ministry of Finance and Public Credit (SHCP). Despite the fiscal underspend, public revenues increased during the same period.

The Public Finance and Public Debt Report indicates that from January to April, the government spent MX$3 trillion, with a budget underspend of MX$216.6 billion—surpassing the total approved budget for autonomous branches, which stands at MX$149.7 billion.

Spending reached 93.3% of the planned allocation for the period, according to SHCP, led by Minister Edgar Amador Zamora, which emphasized the timely distribution of resources to public goods and services.

Programmed spending—focused on delivering public goods and services—declined by 7.6% year-over-year to MX$2.6 trillion. Non-programmed spending, excluding debt interest, totaled MX$529.4 billion, representing a 4.6% increase.

Public debt servicing costs rose 9.1% annually to MX$389.7 billion but remained MX$33.8 billion below projections.

On the revenue side, budgetary income grew 6.5% annually to MX$2.8 trillion, though it fell short of projections by MX$9.3 billion, insufficient to fully cover expenditures. Tax revenues, however, surged to MX$2.02 trillion, a 10.1% real increase—the highest for this period since 2015—attributed to strong domestic consumption, labor market stability, and improved tax collection efficiency.

Tax collections exceeded projections by MX$83.9 billion. Key contributions included income tax (ISR) at MX$1.17 trillion (up 9.5%), value-added tax (IVA) at MX$537.2 billion (up 13.9%), and the special tax on production and services (IEPS) at MX$214.3 billion (down 1%). Import taxes generated MX$56.2 billion, a notable 47.6% increase.

Mexico’s fiscal deficit, measured through Public Sector Borrowing Requirements (RFSP), dropped 63% year-over-year to MX$165.1 billion. The budget deficit stood at MX$105 billion, significantly below the projected MX$312 billion. The primary budget balance posted a surplus of MX$285 billion, exceeding estimates by MX$174 billion.

The government aims to reduce the RFSP to 3.9% of GDP this year, down from 5.7% in 2024, through spending adjustments in key sectors such as health, security, and the environment, according to SHCP.