La Jornada: Economic Package 2027 is a “litmus test” for the Treasury

The 2027 Economic Package “is a litmus test” so that the federal government can respond to the actions of the risk rating agencies that deteriorated the country’s credit profile between April and May, specialists explained.

It is not only about the Ministry of Finance and Public Credit presenting defensible assumptions, especially that of economic growth, but also showing that the so-called “fiscal consolidation” – the reduction of the gap between expenses and income – has something to support it, they expanded.

Among the universe of economic variables that make up the package there are three core concepts: income, expenses and debt. The vertex between them results in the public deficit, an average that summarizes whether the public administration is collecting enough to provide the necessary public services and pay the debt.

Aldo Gómez, economic analyst from Mexico How are we doing?, explained that this package is “especially important because it has to show that fiscal consolidation is credible (…) the rating agencies will not only see this goal, but that the growth and income assumptions are realistic, as well as the support for Pemex and the debt trajectory.”

The country has just registered a public deficit in 2024 not seen in three decades.

According to the updates published in the 2027 Pre-Criteria, the public deficit ended 2024 at 5.8 percent of gross domestic product (GDP); In 2025 it went to 4.9 and, subject to what is presented today, it is expected to end 2026 at 4.1 and then fall to 3.5 in 2027.

With these projections in place, debt at its broadest extent is estimated to rise to 55 percent of GDP next year. And, although the Treasury differs in how to measure this progress, the same agency states that public debt grows faster than the economy ((bit.ly/4gYXDdj).

“The 2027 Economic Package is the government’s first real opportunity to respond to the cycle of credit actions in April and May,” explained Jorge Cano, coordinator of the Public Expenditure Program in Mexico Evalúa.

In addition, he points out, the route must be proposed to reduce the public deficit to a range close to 2.5 percent of GDP in the coming years.

This 2027 budget “is a litmus test in which the federal government must be able to move towards fiscal consolidation and a reduction in the fiscal deficit,” says Guillermo Mendieta, spokesperson for the Tax Audit Technical Commission of the College of Public Accounting of Mexico.

Specialists agree that the 2026 collection, with zero growth until July, is proof that a tax reform – a review not only of how it is collected but also how it is spent – ​​can no longer be postponed. However, there are no signs of anything like that happening this day.

However, “the problem we have come to is that in the face of low economic growth, there is a risk that a poorly thought-out tax reform could further affect job creation or consumption,” Cano explained.

So far, what has been a little advanced in Congress is to continue stretching revenue through the so-called “healthy taxes” – with taxes on alcohol and foods with high sodium content – ​​that have no traceability to health budgets.

“There are no clear signs of a deep fiscal reform, and regarding healthy taxes, although it is true that they can make sense for public health reasons and also provide additional income, they do not have the scale by themselves to solve the structural problem of public income in the Mexican government,” Gómez explained.

In turn, Mendieta recovers what happened with the income tax throughout 2026. It has fallen 6 percent until July, and according to him, this reflects the slowdown in economic activity in the country. “It is an impact of the ‘non-growth’ that has been recorded since last year.”

Although the Pre-Criteria 2027 already warn of a 3.2 percent reduction in public spending for the following year, specialists warn that “if the objective is to maintain the guarantee of rights and promote economic development, there is no longer room for more cuts.”