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Mexico's public finances: budget rules, federal debt, state borrowing limits and the 2027 package

Last verified: 2026-10-26 · Status: Changing

Congress must approve every year how much the federal government may borrow, federal loans may only fund works that raise public revenue, refinancing, monetary regulation or declared emergencies, and states and municipalities cannot borrow abroad or in foreign currency at all. The Finance Ministry's 2027 package projects a public sector borrowing requirement (RFSP) of 3.9 percent of GDP, down from 4.1 percent estimated for 2026, a primary surplus, and broad public debt (SHRFSP) of 55.0 percent of GDP; interest costs take 4.0 percent of GDP. Budget dates are fixed by law: the package goes to Congress by 8 September, the Revenue Law must clear the Senate by 31 October and the budget the Chamber of Deputies by 15 November.

USD figures use MXN 18.5026 per US dollar, the noon buying rate for 16 October 2026 published by the US Federal Reserve (H.10 series DEXMXUS, read on FRED), the latest value available on 2026-10-26. Conversions are for orientation only.

Key facts

Public sector borrowing requirements (RFSP), 2026 estimate, share of GDP	4.1 % of GDPCGPE 2027 section II.6, as of 2026-09-08 · in force
Broad public debt (SHRFSP), end 2026 estimate, share of GDP	54.0 % of GDPCGPE 2027 section II.6, as of 2026-09-08 · in force
Budget revenue proposed for 2027	9156528.9 MXN millionCGPE 2027 section II.6, as of 2026-09-08 · pending
Net budget spending (gasto neto pagado) proposed for 2027	10515087.7 MXN millionCGPE 2027 section II.6, as of 2026-09-08 · pending
Financial cost of public debt proposed for 2027, share of GDP	4.0 % of GDPCGPE 2027 section II.6, as of 2026-09-08 · pending
Federal tax revenue proposed for 2027, share of GDP	15.9 % of GDPCGPE 2027 section II.6, as of 2026-09-08 · pending
Oil revenue proposed for 2027, share of GDP	2.5 % of GDPCGPE 2027 section II.6, as of 2026-09-08 · pending
Budget balance proposed for 2027, share of GDP	-3.4 % of GDPCGPE 2027 section II.6, as of 2026-09-08 · pending
Economic primary surplus proposed for 2027, share of GDP	0.6 % of GDPCGPE 2027 section II.6, as of 2026-09-08 · pending
Mexican oil export mix price assumed for 2027	61.8 USD per barrelCGPE 2027 section II.5; LFPRH art. 31, as of 2026-09-08 · pending
Nominal GDP assumed for 2027	39419.4 MXN billionCGPE 2027 section II.5, as of 2026-09-08 · pending
General Participations Fund, share of federal shareable revenue	20 %Ley de Coordinación Fiscal art. 2, as of 1995-12-15 · in force
Net borrowing ceiling for a state or municipality rated sustainable, share of unrestricted revenue	15 %LDFEFM art. 46 I, as of 2016-04-27 · in force
Can states and municipalities borrow abroad or in foreign currency	No ruleConstitution art. 117 VIII; LDFEFM art. 22, as of 2015-05-26 · in force
Deadline for the Chamber of Deputies to approve the federal budget	15 November dateConstitution art. 74 IV; LFPRH art. 42 V, as of 2004-07-30 · in force
Deadline for the Senate to approve the Federal Revenue Law	31 October dateLFPRH art. 42 IV, as of 2026-04-09 · in force
Split of excess revenue remainder: states' fund, federal stabilization fund, state infrastructure	25 / 65 / 10 %LFPRH art. 19 IV, as of 2014-08-11 · in force

The rule

1. What the federal government may borrow for. Congress sets the bases on which the Executive may borrow and guarantee on the nation's credit. No loan may be taken except to carry out works that directly increase public revenue, for monetary regulation, for refinancing or restructuring on the best market terms, or during an emergency declared under art. 29. Congress approves the borrowing amounts each year in the Revenue Law (Ley de Ingresos de la Federación).Constitución Política de los Estados Unidos Mexicanos (DOF 5 February 1917, consolidated text to DOF 7 October 2026), Art. 73, section VIII, items 1o and 2o, 2015-05-26 official text · verified 2026-10-26

2. States and municipalities cannot borrow abroad. States and municipalities may not take on obligations or loans with foreign governments, foreign companies or individuals, or payable in foreign currency or outside Mexico. They may borrow only for productive public investment and its refinancing or restructuring, on the best market terms, never for current spending, and only up to the amounts their legislatures approve. The financial discipline law repeats the rule for all local public entities and caps transaction costs at 0.15 percent of the amount borrowed.Constitución Política de los Estados Unidos Mexicanos (DOF 5 February 1917, consolidated text to DOF 7 October 2026); Ley de Disciplina Financiera de las Entidades Federativas y los Municipios (LDFEFM), DOF 27 April 2016, last reform DOF 10 May 2022, Constitution art. 117, section VIII; LDFEFM art. 22, 2022-05-10 official text · verified 2026-10-26 · changed: The 0.15 percent cap on financing costs was added to LDFEFM art. 22 by the reform published in the DOF on 10 May 2022.

3. A traffic light for state debt. The Finance Ministry rates every state and municipality that has registered debt under an alert system with three indicators: debt to unrestricted revenue, debt service to unrestricted revenue, and short term obligations net of cash to total revenue. The rating sets a net borrowing ceiling: up to 15 percent of unrestricted revenue for sustainable debt, 5 percent for debt under observation, and zero for high debt. All local loans, bond issues, leases, factoring, guarantees, derivatives over one year and public private partnership contracts must be entered in a single public registry (Registro Público Único).
Example: A state with MXN 40,000 million of unrestricted revenue rated sustainable may add up to MXN 6,000 million of net financing in the year; if rated under observation, MXN 2,000 million; if rated high, nothing. / About USD 324 million, USD 108 million and zero, respectively.Ley de Disciplina Financiera de las Entidades Federativas y los Municipios (LDFEFM), DOF 27 April 2016, last reform DOF 10 May 2022, Art. 43, art. 44, art. 46 and art. 49, 2018-01-30 official text · verified 2026-10-26

4. The budget calendar. By 1 April the Executive sends Congress a preliminary document with objectives and scenarios for growth, inflation, interest rates, oil prices and the budget balance; by 30 June the program structure; and by 8 September the General Criteria of Economic Policy (CGPE), the Revenue Law initiative and the budget proposal. The Revenue Law must be approved by the Chamber of Deputies by 20 October and the Senate by 31 October. Only the Chamber of Deputies approves the budget (Presupuesto de Egresos), by 15 November. Both must be published in the DOF within 20 calendar days of approval. In the year a new President takes office the package is due by 15 November.Constitución Política de los Estados Unidos Mexicanos (DOF 5 February 1917, consolidated text to DOF 7 October 2026); Ley Federal de Presupuesto y Responsabilidad Hacendaria (LFPRH), DOF 30 March 2006, last reform DOF 9 April 2026, Constitution art. 74, section IV; LFPRH art. 42, 2026-04-09 official text · verified 2026-10-26

5. What the economic package must disclose. The CGPE must include five year public finance projections beyond the budget year, results for the past five years, the annual target for public sector borrowing requirements (RFSP) set by the public sector's financing capacity, and a cap on structural current spending with five years of projections. It must also present the main short term fiscal risks with proposals to address them and multiyear spending commitments for the budget year and the next five years.Ley Federal de Presupuesto y Responsabilidad Hacendaria (LFPRH), DOF 30 March 2006, last reform DOF 9 April 2026, Art. 16, 2026-04-09 official text · verified 2026-10-26 · changed: The paragraph on fiscal risks and multiyear spending commitments in art. 16 was reformed by the decree published in the DOF on 9 April 2026.

6. Where windfall revenue goes. Revenue above the Revenue Law estimate first covers higher revenue sharing with states, higher interest costs from rate or exchange rate moves, and natural disasters. The remainder goes 25 percent to the states' revenue stabilization fund (FEIEF), 65 percent to the federal budget revenue stabilization fund (FEIP) and 10 percent to state infrastructure projects, until the funds reach reserves of 0.04 and 0.08 times estimated total taxes and Mexican Petroleum Fund transfers.
Example: A MXN 10,000 million remainder of excess revenue would be split MXN 2,500 million to the FEIEF, MXN 6,500 million to the FEIP and MXN 1,000 million to state infrastructure. / About USD 135 million, USD 351 million and USD 54 million.Ley Federal de Presupuesto y Responsabilidad Hacendaria (LFPRH), DOF 30 March 2006, last reform DOF 9 April 2026, Art. 19, sections I and IV, 2014-08-11 official text · verified 2026-10-26

7. Revenue sharing with states. Most taxes are federal and collected by the SAT; states receive participations. The General Participations Fund is 20 percent of federal shareable revenue (recaudación federal participable) collected in the year, distributed by formula. The 2027 package projects participations of MXN 1,547,607.9 million, 3.9 percent of GDP.
Example: Participations of MXN 1,547,607.9 million projected for 2027. / About USD 83,643 million.Ley de Coordinación Fiscal, DOF 27 December 1978, last reform DOF 3 January 2024; Criterios Generales de Política Económica 2027, SHCP, delivered to Congress on 8 September 2026, LCF art. 2, first paragraph; CGPE 2027 section II.6, 1995-12-15 official text · verified 2026-10-26

8. The 2027 numbers proposed by the Finance Ministry. The 2027 package projects budget revenue of MXN 9,156,528.9 million (23.2 percent of GDP), of which oil revenue is 2.5 percent of GDP and tax revenue 15.9 percent; net spending of MXN 10,515,087.7 million (26.7 percent of GDP); interest costs of MXN 1,574,950.2 million (4.0 percent of GDP); a budget deficit of 3.4 percent of GDP; RFSP of MXN 1,555,655.8 million (3.9 percent of GDP); and SHRFSP of MXN 21,665,995.8 million (55.0 percent of GDP). These are proposals: only the Revenue Law and budget published in the DOF bind, and the legal deadlines for approval are 31 October (Revenue Law, Senate) and 15 November (budget, Chamber of Deputies).
Example: Budget revenue MXN 9,156,528.9 million; interest cost MXN 1,574,950.2 million. / About USD 494,878 million and USD 85,120 million.Criterios Generales de Política Económica 2027, SHCP, delivered to Congress on 8 September 2026, Sections II.5 and II.6 (macro framework and public finance estimates 2026 to 2027), 2026-09-08 official text · verified 2026-10-26

Item	2026 approved	2026 estimate	2027 proposal
Budget revenue	22.5	23.0	23.2
of which oil	3.1	3.0	2.5
of which federal tax revenue	15.1	15.4	15.9
Net spending paid	26.1	26.6	26.7
Financial cost of debt	4.1	3.7	4.0
Participations to states	3.8	3.9	3.9
Budget balance	-3.6	-3.6	-3.4
RFSP (broad public balance)	-4.1	-4.1	-3.9
SHRFSP (broad public debt)	52.3	54.0	55.0
Real GDP growth range (%)	1.8 to 2.8	1.0 to 2.0	1.5 to 2.5
Inflation, December on December (%)	3.0	3.5	3.0
Exchange rate, end of period (MXN per USD)	18.9	17.8	18.0
Mexican oil mix price (USD per barrel)	54.9	78.4	61.8

Federal public finances, share of GDP: 2026 as approved, 2026 as now estimated, and the 2027 proposal. Source: SHCP, CGPE 2027 sections II.5 and II.6 (8 September 2026). 2027 figures are a proposal pending in Congress.

Year	RFSP	SHRFSP
2026	-4.1	54.0
2027	-3.9	55.0
2028	-3.7	55.6
2029	-3.6	56.1
2030	-3.4	56.4
2031	-3.2	56.5
2032	-3.1	56.5

Medium term path projected in CGPE 2027, share of GDP (Finance Ministry projections, not commitments).

Worked example

Interest bill: the 2027 proposal sets debt interest at MXN 1,574,950.2 million against nominal GDP of MXN 39,419.4 billion, so 4.0 percent of GDP, about USD 85,120 million at MXN 18.5026.
Deficit financing: an RFSP of MXN 1,555,655.8 million (3.9 percent of GDP) is about USD 84,078 million.
Peso sensitivity: the CGPE assumes MXN 18.0 per US dollar at the end of 2027; a weaker peso raises the peso cost of foreign currency debt and, under LFPRH art. 19 I, excess revenue first covers the higher interest cost.

Step by step

1. Each 8 September, read the CGPE: the macro framework (growth, inflation, exchange rate, oil price) and the RFSP and SHRFSP path are the government's base case for the next year.
2. Track the Revenue Law through the Chamber of Deputies (by 20 October) and the Senate (by 31 October), and the budget through the Chamber of Deputies (by 15 November); then check the DOF publication, due within 20 calendar days.
3. If you lend to or contract with a state or municipality, confirm the debt is in the Registro Público Único, check its alert system rating, and confirm the local legislature authorized the amount.
4. If a public counterparty pays you from participations, check the payment trust structure, since participations pledged through a trust count toward the entity's alert system indicators.
5. Read the Finance Ministry quarterly reports to Congress, due 30 calendar days after each quarter ends (LFPRH art. 107), to compare actual revenue and spending with the approved budget.

Common traps

Citing the economic package as law. The CGPE figures are proposals; only the Revenue Law and budget published in the DOF bind, and Congress may change them.
Comparing different deficit measures. The budget balance (-3.4 percent of GDP proposed for 2027) excludes off budget needs; the RFSP (-3.9 percent) is the broad measure the Ministry targets.
Lending to a state in dollars. Any obligation of a state or municipality payable in foreign currency, abroad or to a foreign lender breaches Constitution art. 117 VIII.
Assuming a state can borrow to cover payroll or operating costs. Local borrowing is limited to productive public investment and refinancing.
Ignoring the oil price assumption. Oil revenue is projected to fall to 2.5 percent of GDP in 2027, so a change in oil prices moves the budget less than in the past.

Sources

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