The Ministry of Finance (MoF) released its public finance report for June. On a 12-month rolling basis, the broadest measure of the public balance (PSBR) posted a deficit of 4.8% of GDP through June, while the primary public balance swung to a surplus of 0.5% of GDP. During the first half of the year, real revenues rose by 3.4% YoY, supported by higher-than-expected import taxes and VAT revenues, despite a significant contraction in Pemex oil revenues amid decreasing oil production. However, real revenues were 2.3% below the official forecast. On the other hand, total expenditure contracted by 3.8% YoY in real terms, primarily due to lower administrative expenses and capital investment, despite an 8.4% YoY real growth in pensions. Finally, net government debt stood at 49.5% of GDP, below the MoF’s 2025 forecast of 52.3%, driven by exchange rate dynamics.
Our view: June figures showed that the pace of revenue improvement continues to slow. Expenditures declined, reaching 94.1% of the budget for the first half, primarily due to cuts in public investment. For 2025, we anticipate fiscal consolidation with a nominal deficit of 4.0% of GDP, a rising net government debt of 52.3%, and a primary surplus of 0.6%, in a context of lower interest payments compared to the previous year. We think that despite some tailwinds for revenues, such as increased use of technology in customs and higher taxes on products from countries without a trade agreement with Mexico, additional revenue-enhancing measures may be needed in 2026.
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