United Mexican States · Estados Unidos MexicanosGovernment Budget
Fiscal Year 2024
Revenue by Source
Max = ~MX$3.1T (ISR Income Tax) · Total ~MX$8.0TExpenditure by Function
Max = ~MX$1.8T (Pensions & Social Protection) · Total ~MX$9.9TPemex: The $100B USD Black Hole Sinking the Fiscal State
Petróleos Mexicanos (Pemex) is the world's most indebted oil company, with liabilities exceeding $100 billion USD. Once the Mexican government's primary cash cow — in 2012 it contributed ~40% of all federal revenues — Pemex has become a fiscal drain. Production collapsed from 3.4 million barrels per day in 2004 to ~1.6 million in 2024. AMLO's administration spent ~1% of GDP annually supporting Pemex: capital injections, tax relief worth hundreds of billions of pesos, pension obligations absorbed by the federal budget, and the politically-driven Dos Bocas refinery (Olmeca) that went billions over budget and has operated well below capacity. IMF Article IV consultations repeatedly flagged Pemex as a systemic contingent liability threatening sovereign creditworthiness.
Pemex debt >$100B USD · production −53% since 2004 · ~1% GDP subsidy/yrRemittances: $64.7B USD — More Than Oil Exports, 3.5% of GDP
In 2024, Mexico received a record $64.7 billion USD in remittances — more than double the $28.4 billion generated by crude oil exports. The funds, sent by roughly 11 million Mexican workers living in the United States, represent approximately 3.5% of GDP and support an estimated 1.8 million households. Remittances have grown for eleven consecutive years, becoming Mexico's most reliable hard-currency inflow and a de facto social transfer programme for rural and low-income families. The Trump administration's threats to tax remittances at 3.5% — potentially costing Mexico up to $13 billion annually — became a major diplomatic and economic flashpoint in 2024–2025.
Remittances: $64.7B USD record · 2× oil exports · 3.5% GDPOECD's Lowest Tax Ratio: ~17% of GDP vs. 34% OECD Average
Mexico collects tax revenues equivalent to approximately 17% of GDP — the lowest among all 38 OECD members, and roughly half the club average of 34%. The structural causes are deeply entrenched: 55%+ of workers are in the informal economy and pay no income tax; the IVA zero-rates food and medicines (losing ~1.5% GDP in revenue annually); gasoline IEPS subsidies frequently turn the excise tax negative; and corporate tax avoidance is widespread. No comprehensive tax reform has passed since 2014. The fiscal consequences are stark: Mexico spends less on health, education, and infrastructure than virtually any peer — not because it wants to, but because it lacks the revenue base to do otherwise.
Tax/GDP: ~17% · OECD avg 34% · informal economy >55%Judicial Reform 2024: Electing All Judges by Popular Vote
In September 2024, outgoing President AMLO passed a sweeping judicial reform making Mexico the first country in the world to elect all federal judges — including Supreme Court justices — by popular vote. The reform was part of AMLO's 'Plan C' constitutional package, passed by Morena's supermajority in Congress during the final weeks of his presidency. Critics — including the United States government, foreign investors, and Mexico's own judiciary — warned the reform would destroy judicial independence, undermine the rule of law, and sabotage USMCA enforcement. The peso fell from 16 to 20.5 MXN/USD between April and November 2024. Claudia Sheinbaum, who took office on 1 October 2024, endorsed the reform and oversaw its implementation.
Judges elected by popular vote · peso −28% Apr–Nov 2024Nearshoring: Mexico as the World's Factory — Promise vs. Reality
Mexico overtook China as the United States' top trading partner in 2023, and $39 billion in foreign direct investment flowed in during 2024 — a headline record. The opportunity is real: US-China decoupling is pushing manufacturing towards Mexico's 2,000-mile border with the US, and the USMCA trade framework provides preferential access. But the composition of FDI is troubling: only 6% was genuinely new investment in 2024 (vs. the OECD average of 23%), with the rest being reinvested profits and intra-company loans. Infrastructure bottlenecks — chronic electricity shortages, an under-built rail network, and PEMEX-dominated energy policy hostile to renewables — are constraining the nearshoring boom. Sheinbaum's 'Plan México' (January 2025) targets 15% local content growth in automotive and electronics by 2030.
#1 US trade partner (2023–24) · FDI $39B · only 6% new capital5.7% Deficit: Record Since 1988, Driven by Pre-Election Spending
Mexico's 2024 public sector borrowing requirement (PSBR) hit 5.7% of GDP — the largest deficit since the late 1980s debt crisis. The primary drivers were AMLO's final-year spending push: accelerated megaproject payments for the Tren Maya, Olmeca refinery, and Felipe Ángeles airport; a doubling of the Pensión para el Bienestar benefit; and continued capital injections into Pemex. The government invoked a legal escape clause in its fiscal rule (triggered by a projected >10% oil price drop) to exceed its primary balance target. Claudia Sheinbaum, taking office in October 2024, pledged to bring the deficit down to 3.9% of GDP in 2025 — a ~2pp consolidation requiring substantial spending cuts in a country that already underspends on health, education, and infrastructure.
5.7% deficit — largest since 1988 · escape clause invokedPrimary sources: Primary sources: SHCP (Secretaría de Hacienda y Crédito Público) — Cuenta de la Hacienda Pública Federal 2024; Informe sobre la Situación Económica, las Finanzas Públicas y la Deuda Pública (quarterly); SAT (Servicio de Administración Tributaria) — Estadísticas de Recaudación 2024; INEGI — Cuentas Nacionales & GDP 2024; Banxico (Banco de México) — Estadísticas de Balanza de Pagos & Remesas 2024; IMF — Mexico Article IV Consultation 2024 (Staff Country Report 2025/286); IMF Working Papers 2024/053 (Pension Assessment); OECD — Revenue Statistics 2024: Mexico; BBVA Research — Mexico Economic Outlook 2024; Scotiabank Economics — LatAm Insights (Mexico 2024–2025).
Methodology: All peso figures represent the Sector Público Presupuestario (SPP) — the consolidated public sector budget — per SHCP. This encompasses the federal government (ramos autónomos, administrativos, y generales), social security institutions (IMSS, ISSSTE, INFONAVIT), state productive enterprises under budget (Pemex, CFE), and other entities. The headline deficit measure used is the Public Sector Borrowing Requirement (RFSP/PSBR), which in 2024 reached 5.7% of GDP — the largest since 1988. The Historical Balance of the PSBR (HBPSBR), Mexico's broadest public debt measure (analogous to gross public sector debt), reached 51.3% of GDP at end-2024. GDP: ~MX$33.8 trillion at current prices (INEGI/SHCP 2024). Average 2024 exchange rate: approximately 18.5 MXN/USD. Revenue and expenditure line items are estimates based on SHCP budget documents, SAT collection data, and INEGI national accounts; Pemex and CFE figures are included within consolidated sector accounts and subject to revision. Mexico reports on a calendar-year basis. Currency: Mexican peso (MXN/MX$).