Still, the relief has limits. The government’s room for maneuver remains limited, since a large part of the budget is allocated to subsidies, social programs and interest payments, which already consume almost 80% of total spending. The financial cost will reach 3.75% of GDP, its highest level in a decade, putting pressure on the space for productive investment.
Weak growth
The Mexican economy faces fragile growth. HR Ratings estimates that GDP will barely advance 0.9% in 2025, after 1.2% in 2024, affected by the slowdown in the United States and the decline in public investment after the conclusion of large infrastructure projects. Inflation remains above the Bank of Mexico’s target, with an estimated close of 4.0%, and the average exchange rate at 19.50 pesos per dollar.
Although the Mexican currency has appreciated during 2025, after the strong depreciation of the previous year, the rating agency warns that new commercial or political tensions, especially due to the renegotiation of the T-MEC, could alter exchange stability and increase the debt measured in pesos.
The report indicates that a favorable renegotiation of the treaty could attract more investment to key sectors, but an adverse scenario would represent a risk for the sovereign rating.
Pemex and pensions
The financial rescue of Pemex and the increase in spending on pensions and retirements, which already represent 4.3% of GDP, continue to be the greatest sources of pressure. Although the Treasury has reduced direct transfers to the oil company, its debt continues to increase the historical balance of the public sector.
HR Ratings predicts that the debt/GDP ratio will continue to grow gradually and exceed 57% by 2032, driven by population aging, rising real rates and the need to finance social programs.
The rating agency considers that Mexico can regain a positive outlook if it maintains deficits below 3% of GDP, improves collection and manages to boost private investment. But a drop in income or growth close to 1% would put fiscal stability at risk and force resort to more debt.
