Mexico's Strategic Budget Moves: Narrowing Deficits and Economic Projections for 2026

Mexico is aiming to slightly decrease its budget deficit to 4.10% by 2026, according to the finance ministry's proposal. This move comes on the back of GDP growth expectations, which are set to rise more than previously forecasted.

The government is under mounting pressure both to reduce the deficit and to continue supporting social programs while managing the debts of the heavily indebted Pemex. President Claudia Sheinbaum's government has also proposed revising the 'General Import Tax' and introducing 'healthy taxes' to discourage consumption of unhealthy products like soft drinks.

Mexico's financial blueprint is poised for debate in Congress, where Sheinbaum's party holds a commanding majority. Critical economic forecasts for 2026 include a more optimistic inflation alignment with the Bank of Mexico's goals, projecting it to hit 3.0%, and GDP growth at between 1.8% and 2.8%.

(With inputs from agencies.)