by Saúl Escobar Toledo
Note that the blog’s title and content were originally written in Spanish. The English version presented on this page was generated via machine translation to facilitate more rapid dissemination of information. This version may differ in meaning from the original. For precise information and context, please refer to the Spanish version via the link above.
A few days ago, the Ministry of Finance submitted to Congress the document known as the “pre-criteria,” which, according to the government office, provides “the preliminary framework of the macroeconomic and fiscal outlook of the Government of Mexico, which will serve as the basis for the preparation of the Economic Package for fiscal year 2027.”
These are not, therefore, the final proposals that will be submitted to Congress for approval of the Budget and the Revenue Law for 2027. Rather, they are initial intentions and figures that should be interpreted as signals of what the government intends to do and the vision it holds regarding economic policy. Their importance is not minor, although the proposed guidelines may undergo significant changes.
The document analyzes the international situation, highlighting its “volatility” due to geopolitical conflicts, disruptions in global trade, and changes in U.S. trade policy at a time when the review of the USMCA is being negotiated.
Faced with these challenges, the Ministry of Finance states that the country has “solid fundamentals thanks to low and sustainable public debt, a resilient financial system, historically high levels of foreign investment,” and, above all, as we emphasize, “a strategic position within North American value chains.”
However, the Ministry goes further and states that the “development model with well-being” rests on three pillars: first, strengthening household income through increases in the minimum wage and “direct transfers and policies.” Second, “investment in strategic infrastructure,” which will serve to boost growth, increase productive capacity, close regional gaps, and stimulate private investment. The third pillar is “fiscal responsibility” to preserve stability.
The model presented in the document has several virtues: it proposes redistributing income, accelerating growth through public investment, maintaining price stability, and avoiding a potential crisis stemming from the size of public debt and worsening global conflicts.
It is important to highlight the emphasis placed on investment, as it has been a structural weakness for decades. Last year, it collapsed. The document acknowledges that public investment decreased by 19% and private investment by 4%. Notably, investment in machinery and equipment fell by 8.1%, indicating that productive capacity shrank and, consequently, so did sources of employment in the industrial sector.
The Ministry appears to recognize this problem and states that “the Infrastructure Investment Plan for Development with Well-being and the Plan for Strengthening and Expanding the National Electric System 2025–2030 will accelerate priority projects in transportation, energy, ports, water, and health.”
The document also reports on employment issues. It notes that, by the end of 2025, the number of jobs registered with the Mexican Social Security Institute (IMSS) reached 22,517,000, representing an increase of 279,000 positions compared to the end of 2024.
However, it clarifies that this figure includes 217,000 workers who are part of the pilot program for digital platform workers. Excluding these registrations—since these are jobs that already existed—only 72,000 new formal jobs were created last year. Meanwhile, it adds, there was an increase of 630,000 people in the informal sector, raising the corresponding rate to 54.9% of total employment.
Increasing investment, particularly public investment, is essential to improve levels of well-being, encourage growth, and generate employment. As the document emphasizes, “the goal is not only to grow more, but to grow better.”
However, these intentions are not reflected in the numbers. According to the document, public spending will once again be affected. It estimates that by 2027, total budgetary spending will see a real reduction of 4.1% compared to 2026, and programmable paid spending will experience a real decrease of 6.8%.
It is difficult to see how the stated objectives—especially regarding investment—will be achieved if government spending continues to be cut.
The projected decline in spending is explained by the expectation that federal budget revenues will be lower in 2027 compared to estimates for 2026. At the same time, the government aims to reduce the public deficit and maintain current levels of public debt. Therefore, cutting the budget becomes the only option—that is, more austerity.
The spending reductions projected for 2027 are reflected in what the Ministry calls “priority programs.” For example, pensions for older adults, pensions for women, and the Rita Cetina scholarships will see moderate increases of around 4%. More importantly, projected increases for health will be smaller—3.4%—and for upper secondary education services, 3.3%.
Meanwhile, investments—for example in social housing—will increase by only 3.9%; highways and roads, 3.2%; railway infrastructure, 3.4%; and the operation and maintenance of electric power infrastructure, 3.3%.
With such increases, it is difficult to imagine an expansion of public investment in line with the importance and role assigned to it in the announced model. Nor can one foresee significant benefits for increasing production.
The Ministry estimates that in 2027 growth will reach around 1.9–2.9%, higher than the forecast for 2026 (1.8–2.8%), and well above the 0.8% recorded in 2025. However, the reduction in public spending casts doubt on these figures.
Rather, it would seem that the main objective remains reducing inflation. The document estimates that it will fall below the level projected for 2026 (3.7%), reaching 3% in 2027.
Thus, the Ministry’s optimism regarding higher economic growth is based on foreign investment. The document notes that “despite the uncertain environment, in 2025 Mexico recorded a historic high in foreign direct investment of 40.871 billion dollars, an annual increase of 10.8%, according to preliminary figures.”
Although it acknowledges that industrial activities declined by 1.3% last year, and that transport equipment production—mainly for export—fell by 5.6%, it highlights growth in the manufacture of non-electronic medical equipment, petroleum derivatives, and computer equipment. The latter, it adds, “was driven by high levels of exports to the United States, associated with the expansion of technologies linked to artificial intelligence.”
The Ministry’s document admits that manufacturing exports have been the main engine of growth for the Mexican economy. It notes that exports grew by 7% last year, while domestic consumption grew by 1.1%.
Without a substantial expansion of public spending and investment, the Ministry continues to rely on exports to the United States—now mainly computer products rather than automobiles—as the primary source of economic acceleration.
However, experience over recent decades has shown that this driver yields only modest growth, because many components of the final goods are not produced domestically. The value added of exports is low: Mexico assembles goods that the final consumer purchases, largely using parts and components imported from the United States.
This affects domestic consumption: even if wages increase (mainly minimum wages and, to a lesser extent, contractual wages), formal employment grows little and, consequently, informal employment rises.
The Ministry’s good intentions require less rhetoric and more decisive action. The figures presented in the “pre-criteria,” particularly regarding spending and public investment, do not signal a “true change” in the direction of economic policy. Hopefully, they will make corrections.