Sheinbaum to Assess State of PEMEX

President-elect Claudia Sheinbaum met with Octavio Romero, CEO, PEMEX, to evaluate the state of the company, ninety days before she is scheduled to assume the presidency. Sheinbaum’s administration is expected to continue with President López Obrador’s austerity measures as she inherits a significant national debt, which she aims to reduce in 2025.

During the meeting, Sheinbaum and Romero discussed the current production status of PEMEX, with particular focus on the Olmeca refinery, which is on the verge of a full operation despite continuous delays. 

Sheinbaum has not yet decided if Romero will continue leading PEMEX after she takes office. Meanwhile, Rogelio Ramírez de la O, current and future Minister of Finance and Public Credit, has confirmed he will remain in his position at Sheinbaum’s request and that support to PEMEX will continue. He outlined plans to strengthen collaboration with PEMEX, leveraging congressional support to optimize the efficient use of public resources. Despite these plans, Sheinbaum will inherit PEMEX’s substantial financial burden, with the company’s debt exceeding US$100 billion, marking it as the most indebted oil company globally and prompting a downgrade of its credit rating by several agencies.

Ramírez de la O emphasized the importance of improving communication with investors and rating agencies to reaffirm Mexico’s priorities of macroeconomic stability, fiscal prudence, and the viability of fiscal objectives.

Following in López Obrador’s footsteps, Sheinbaum plans to implement austerity measures during her first year in office, preparing for a significant reduction in government spending in 2025. She announced an adjustment in the government’s operating expenses next year but did not specify figures. 

In a recent meeting with the Business Coordinating Council (CCE), Sheinbaum set a goal of reducing the fiscal deficit to 3.5% of GDP. Ramírez de la O developed the Financial Requirements of the Public Sector (RFSP), the broadest measure of the fiscal deficit, to be 5.9% of GDP by the end of 2024—the highest in over two decades. By 2025, the Treasury proposes reducing the fiscal deficit to 3% of GDP as part of a fiscal consolidation process.

The Center for Economic and Budgetary Research (CIEP) highlights that next year’s public finances will see a cut in public spending close to 3% of GDP, partly due to the completion of key projects from the current administration, as well as lower financial costs, subsidies, and personal services. To achieve a fiscal deficit of 3% of GDP, the new administration will need to increase public income, review the efficiency of public spending, or continue resorting to debt.