Mexico’s 2026 Budget Targets Fiscal Reform and Major Projects

Just days after President Claudia Sheinbaum delivered her first government report, the Ministry of Finance and Public Credit (SHCP) unveiled Mexico’s 2026’s Economic Package. The plan centers on fiscal consolidation, selective tax adjustments, and major infrastructure projects.

According to economic analyst Enrique Covarrubias, the government’s first budget comes at a crucial moment following last year’s sharp fiscal deficit and ongoing trade frictions with the United States. “The deficit reached nearly 6% of GDP in 2024, a level not seen in decades,” he told MBN. “This year is the first chance to start consolidating public finances.”

#PaqueteEconómico2026 | 📊 En un contexto global marcado por una desaceleración económica, tensiones comerciales y creciente incertidumbre política, @Hacienda_Mexico redujo su previsión de crecimiento para 2025 de 2.0%-3.0% a 0.5%-1.5%.

— CIEP, A.C. (@ciepmx) September 9, 2025

The SHCP forecasts GDP growth of 0.5%–1.5% in 2025 and 1.8%–2.8% in 2026. Inflation is projected to ease from 3.8% in 2025 to 3.0% in 2026, while interest rates could fall from 7.3% to 6.0%. The deficit is expected to shrink from 5.7% of GDP in 2024 to 4.1% in 2026, stabilizing debt at 52.3% of GDP.

Ricardo Cantú Calderón, revenue and debt researcher, Center for Economic and Budgetary Research (CIEP), cautioned that the estimates may still lean optimistic. “Productivity has dropped below 2005 levels, which discourages investment. And when the deficit is adjusted, physical investment is usually the first to be cut,” he told MBN.

He also warned that Mexico’s demographic shift toward an aging population could weigh on long-term growth. “We are close to the peak of the working-age population, yet we are not tackling the structural issues needed to ensure sustainable development,” Cantú said. Debt service remains a central challenge.

The cost has climbed to 4.1% of GDP, now exceeding spending on both health and education. “Mexico is borrowing to service its debt. This displacement of resources makes sustained growth harder to achieve,” Cantú stressed. He added that delaying fiscal consolidation to 2028—one year later than initially planned—risks deepening pressures. “Not reducing the deficit sooner creates a snowball effect. The longer consolidation is postponed, the higher the eventual cost,” he said.

Customs and IMMEX Oversight

The package introduces customs reforms with digitalization, AI, biometric verification, and risk analysis tools to curb smuggling. Authorities will also tighten oversight of the IMMEX program, which allows tax-free imports for export. Misuse of IMMEX—when goods stay in Mexico’s domestic market without VAT or IEPS—will be a key enforcement target.

According to Incomex, stricter controls could force companies to redesign supply chains and strengthen compliance. Another priority is shielding industries such as textiles, footwear, automotive, and electronics from practices like undervaluation of imports. Data from ANAM shows foreign trade revenue reached MX$711.93 billion (US$38.11 billion) in 1H25, a 23.4% real increase year-on-year. VAT collection rose 18.8%, with Nuevo Laredo, Manzanillo, and Veracruz leading customs revenues.

Banking, Fintech, and Taxes

While speculation about a structural tax reform persists, Covarrubias said such a move is unlikely in the near term. “A tax reform requires stronger growth and the right political timing. Markets expect it later in the administration,” he told MBN. Instead, the government is adopting targeted tax measures, including:

• Higher IEPS on sugary drinks and tobacco
• Eliminating deductibility for three-quarters of banks’ IPAB contributions
• Stricter rules for digital commerce and fintech platforms

“These measures will raise costs for banks, but the sector remains well-capitalized and credit expansion should continue,” Covarrubias explained. By 2026, financial institutions must apply a 0.90% withholding tax on interest-bearing capital.

Juan Pablo Ortega, financial advisor at Ortega Asesores, explained the impact: “If you invest MX$1 million at 8% annually, you earn MX$80,000. Under the new rate, the tax takes MX$7,200—reducing effective returns once inflation is considered.” He warned the change could pressure investment platforms like GBM, Actinver, and Nubank, which have fueled retail investment since the pandemic.

E-commerce rules will also tighten, with individuals selling via marketplaces: up to 2.5% income tax (RESICO), and registered companies: 4% withholding; unregistered: 20% VAT withholdings: 8% for registered sellers; 16% for foreigners or unregistered users. 

A capital repatriation incentive will remain in place: funds returned by Sept. 8 qualify for a 15% flat tax, provided they are invested productively for at least three years. “The real concern is the government’s broader approach: taxing wherever possible,” Ortega added, warning that future reforms could extend to areas like insurance savings or retirement plans.

Infrastructure Investment

The 2026 budget earmarks over MX$104.6 billion for rail projects, including MX$10.5 billion for the Mexico–Queretaro train and MX$3.1 billion for the AIFA–Pachuca line. The Felipe Ángeles International Airport (AIFA) will receive MX$744.7 million to strengthen its role as an international hub. AIFA is expected to serve 8 million passengers by end-2025, generating over MX$3 billion in revenue. Other projects include port modernization, highway upgrades, and expansion of the National Electric System.

President Sheinbaum said, “All welfare programs are guaranteed, including scholarships for elementary students. Public investment is also assured”, says the document. Covarrubias noted that infrastructure spending could unlock broader investment. “Energy is key—expanding capacity could spark growth across multiple sectors,” he said.

But Cantú countered that current public investment—just 2.5% of GDP—remains too low to support long-term ambitions. PEMEX and Energy Pressures PEMEX’s debt maturities in 2025–2026 pose one of the biggest fiscal challenges. “When you borrow, you must pay it back,” Sheinbaum said, adding that by 2027 these pressures should ease. The government will allocate MX$263.5 billion for PEMEX debt amortization, conditional on improved financial balance.

The goal is for net debt to fall by the end-2026. Rating agencies have cautiously welcomed the measures. At the same time, the Energy Ministry (SENER) will see its budget soar 86.8% to MX$267.4 billion, the largest expansion in the package. Funds will support energy transition projects, regulation, and oversight. By contrast, the Federal Electricity Commission (CFE) faces a small cut, though long-term expansion programs remain funded. Despite federal support, analysts warn PEMEX’s heavy reliance on bailouts—including a US$12 billion bond issue and a planned US$13 billion BANOBRAS vehicle—raises concerns over sustainability. Without structural reforms, they argue, fiscal pressures may persist.

🏥 De acuerdo con el #PaqueteEconómico2026, el sector salud tendría un aumento de 55 mil 551.4 mdp respecto a 2025, y sumaría 996 mil 528 mdp, equivalente a 2.6% del PIB.

📈 Este incremento se debe, en gran medida, al aumento de 11.7% en @Tu_IMSS. En cambio, la @SSalud_mx… pic.twitter.com/GR0kuQg2Rd

— CIEP, A.C. (@ciepmx) September 9, 2025

“The year 2026 will be decisive for deepening shared prosperity,” the SHCP said. “The global environment is normalizing, but domestic fiscal discipline and structural reforms will determine whether Mexico can sustain growth.”