Mexico

Some economists believe Sheinbaum inherited Mexico’s biggest budget black hole since the 1980s, at an expected 5.9% of GDP this year. She aims to reduce it by over two percentage points, down to 3.0%-3.5% in 2025, but, since she has also promised not to increase taxes, it is hard to see exactly how this will be achieved. Finance minister Rogelio Ramírez de la O, who Sheinbaum is keeping in post (he previously served under AMLO), has sought to reassure the markets by saying that this year’s big deficit largely reflects one-off spending to complete the outgoing government’s big infrastructure projects such as the Olmeca (Dos Bocas) refinery, the AIFA airport in Mexico City, and the Mayan tourist train. Sheinbaum herself has been quick to reassure investors saying, “We are going to maintain a responsible equilibrium between debt and GDP, and we are not going to increase the debt”. The country’s current public debt-to-GDP ratio is 45.5%, low compared to many other countries in the region.  

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