La Jornada: Public debt grows in line with the economy, assures the SHCP

According to the Ministry of Finance and Public Credit (SHCP), the interpretation that the public debt grows at a significantly higher rate than the economy is based on a methodologically incomplete comparison, given that to correctly evaluate the evolution of the debt between different quarters, the nominal gross domestic product (GDP) with seasonal adjustment must be used, since each quarter incorporates its own calendar and seasonal effects.

He explained that with the adjusted figures published by the National Institute of Statistics and Geography, nominal GDP went from 34.03 trillion pesos in the third quarter of 2024 to 36.03 in the first quarter of 2026, which represents an increase of 1.99 trillion, equivalent to 5.9 percent, higher than the growth of 4.6 indicated in the note “Public debt is growing at a faster rate than the economy”, published in this medium yesterday Sunday.

From their point of view, the comparison presented underestimates the growth of the nominal economy and overstates the difference compared to the increase in the debt balance. He highlighted that the relevant metric to evaluate sustainability is not nominal growth isolated from the balance, but rather the debt-to-GDP ratio, along with the composition of the debt, its financial cost, average term and maturity profile. “From that perspective, public debt remains stable and under control.”

It indicated that at the end of April 2026, the Historical Balance of the Financial Requirements of the Public Sector was located at 50 percent of GDP, below the 52.6 observed in December 2025.

“This confirms that the debt remains around 50 percent of GDP, on a trajectory consistent with the country’s payment capacity.”

The agency added that the debt balance expressed in pesos incorporates exchange valuation effects. “A depreciation of the exchange rate increases the value in pesos of the debt denominated in foreign currency, even when no new debt has been contracted; in the same way, an appreciation reduces said balance due to the valuation effect.

“Unlike nominal GDP, which mainly reflects the evolution of economic activity and domestic prices, the balance of external debt is directly adjusted by movements in the exchange rate. Therefore, a nominal variation in the total balance of debt should not be automatically interpreted as greater net indebtedness.”