Economics: A first glance at the 2026 Economic Package sent to Congress on September 8

MEXICO - Report 15 Sep 2025 by Mauricio González and Francisco González

On Monday, September 8, the Ministry of Finance and Public Credit (SHCP) sent the 2026 Economic Package to Congress. It includes the government’s forecasts for the country’s macroeconomic outlook, as well as proposals of revenue, expenditures, and the public sector fiscal deficit, which includes the federal government and major state-owned enterprises. In the document, the SHCP acknowledges that the 2025 fiscal deficit will be higher than officially projected (4.3% vs. 3.9% of GDP). This is closer to our forecasts, which have long placed it at 4.7%.

The 2026 Economic Package overestimates revenue and underestimates expenditures. An example of the former is oil revenue, which experienced a significant weakening this year but is projected to recover substantially in 2026. In the latter are pension expenditures, which, according to SHCP, could increase minimally compared to the trend in recent years. In this context, Public Sector Borrowing Requirements (PSBR) could reach 5% of GDP instead of the official target of 4.3%. In addition, PSBR levels are very likely to remain above the 3% of GDP needed to stabilize the public debt/GDP ratio in the coming years, eventually leading to a gradual increase in the country's risk premium.

In terms of this week's indicators, it was reported that consumer inflation in August rose to an annual 3.57% compared to 3.51% in July. Non-core inflation clocked in at 1.38%, primarily attributable to a sharp -8.04% annual decrease in fruit and vegetable prices. Despite this, consumer inflation remains at almost the same level as at the start of the year (3.59% in January) because core inflation was again high in August and above Banxico's tolerance range, at 4.23%, the highest rate since April 2024 and above the year-end figure of 3.65%.

Inegi also published during the week the industrial production index for July, which decreased -1.2% compared to June and -2.8% in annual terms (seasonally adjusted figures). The latter was the largest contraction in industrial production since October 2024. Thus, from January to July 2025, industrial activity decreased by -1.2% compared to the same period the previous year.

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