Record PEMEX Transfers Strain Mexico’s Finances

The record level of federal government transfers to PEMEX closed in 2025 at unprecedented levels, placing growing pressure on public finances and dimming prospects for fiscal consolidation, according to information published by the Mexican Institute for Competitiveness, IMCO. From January to November, financial transfers to the NOC reached MX$392 billion (US$21.995 billion), a historic figure for this point in the year and a central factor shaping Mexico’s fiscal balance as the year draws to a close.

The amount transferred to PEMEX exceeds by 187.8%, or MX$255.8 billion, the financial support originally approved for the entire 2025 fiscal year. It is also 121%, or MX$215 billion, higher than the resources channeled to the company during the same period in 2024. The scale of the support has made PEMEX the dominant variable in the federal budget during the final stretch of the year.

The immediate effect has been an erosion of the state’s effective revenue position, even as headline government income surpassed expectations. Federal government revenues totaled MX$7.47 trillion through November, which is 1.7%, or MX$126.7 billion, above what had been projected. This increase was driven primarily by higher-than-expected collections of income tax, IMCO reported.

However, once the resources transferred to PEMEX are discounted, the picture changes. Net revenues available to the federal government were 6.2%, or MX$281 billion pesos, below the level anticipated for the period. The transfers effectively absorbed the revenue overperformance and reduced the fiscal space for other spending priorities.

On the expenditure side, the impact of the support to PEMEX was equally visible. For the first time this year, total spending exceeded the programmed budget calendar. Actual expenditure was MX$35 billion above schedule, equivalent to an overrun of 0.4%. Without the financial support provided to PEMEX, overall spending would have been 2.6%, or MX$218.6 billion, below the approved program.

The imbalance is reflected in the distribution of spending across government entities. While the Ministry of Energy exceeded its budget by 185%, other key ministries posted significant underexecution. The Ministry of Health failed to spend 22% of its budget. The Navy underexecuted its budget by 12% and the Ministry of Defense by 6%.

The combined effect of higher spending and weaker net revenues resulted in a public sector deficit of MX$968.7 billion as of November. Although this figure is 10.6% lower than the deficit recorded in the same period last year, it stands as the second-largest public deficit in the past 35 years, according to IMCO’s analysis.

Additional data compiled by IMCO underline the structural pressure PEMEX places on public finances. By November 2025, PEMEX contributed MX$221 billion in revenues to the federal government, while receiving MX$392 billion in transfers. The net result for the state was a loss of MX$170 billion. At the same time, the cost of servicing public debt exceeded MX$1 trillion during the first eleven months of the year, the highest level in at least 25 years and a real increase of 11.2% compared with the same period in 2024. Public physical investment, excluding PEMEX investment, fell to MX$480.7 billion by November, a real decline of 26% year on year.

Despite fiscal tightening measures earlier in 2025, PEMEX remained central to the shortfall in public finances, as oil revenues declined and transfers continued to rise. These structural pressures contributed to a broader fiscal narrative in Mexico, where meeting deficit targets while sustaining state-owned enterprises became increasingly challenging.