Government Cuts Funding for MSMEs

The Ministry of Economy has announced a reduction in the 2025 budget allocation for MSMEs. Despite this reduction, the Ministry will continue fostering growth of small businesses by strengthening their integration into value chains, leveraging nearshoring opportunities, expanding access to global markets, and simplifying administrative processes.

The proposed Federal Expenditure Budget (PPEF) for 2025 allocates MX$76.4 million (US$3.8 million) to the “Productive and Competitive Micro, Small, and Medium Enterprises” program, reflecting a 6% reduction from the MX$81.4 million allocated in 2024. Over recent years, the MSME support budget has experienced cuts, declining from MX$2.9 billion in 2019 to MX$81.1 million in 2024 following the closure of the National Entrepreneur Institute (INADEM).

The 2025 PPEF outlines initiatives aimed at improving MSME access to regional markets, particularly those driven by nearshoring and related industries, as well as global markets supported by trade agreements. These efforts are designed to expand consumer bases and enhance competitiveness. Planned actions include providing tailored advisory services and capacity-building programs, ensuring centralized access to administrative procedures, fostering business networking opportunities, integrating MSMEs into e-commerce ecosystems, and strengthening development banking to deliver accessible financing at competitive rates. The government also seeks to promote entrepreneurial growth through digital platforms such as Mipymes.mx, which offers business guides, training modules, and growth strategies for startups.

To further support MSME competitiveness, the government is prioritizing administrative simplification and strengthening the Single Counter platform for small businesses. “Efforts will be coordinated across all levels of government to establish a unified agenda focused on streamlining administrative procedures and services essential for business creation and operations. This initiative seeks to promote transparent and efficient public and private investments.” The Ministry also emphasized its commitment to providing effective and timely assistance, ensuring entrepreneurs receive comprehensive support for navigating administrative processes and accessing necessary resources.

On Nov. 15, the government presented the proposed 2025 Economic Package, which aims to reduce the budget deficit to 3.9% of GDP from an estimated 5.9% in 2024, the highest in over three decades. The Economic Package includes the Federal Revenue Law, the Federal Expenditure Budget, and the General Economic Policy Criteria. It is the first budget of President Claudia Sheinbaum’s administration, and expectations are high given the economic challenges she inherited.

The government forecasts that Mexico’s economy will grow between 2% and 3% in 2025, a more optimistic outlook compared to the International Monetary Fund’s (IMF) estimate of 1.3%. However, analysts have raised concerns about the feasibility of these figures. Gabriela Siller, Head Analyst, Banco BASE, pointed out potential risks to investment in Mexico, including geopolitical uncertainties such as the re-election of former US President Donald Trump, who has threatened tariffs on Mexican goods, and domestic political issues such as proposed judicial reforms.