Mexico | It will be very difficult to continue making progress in fiscal consolidation

Summary

The 2027 Preliminary General Economic Policy Guidelines maintain a responsible fiscal stance, but they rely on more optimistic assumptions than the market, which increases the risk of failing to meet fiscal targets.

Key points

• Key points:
• Combating tax evasion is appropriate, but a perception of arbitrariness that could negatively impact investment and tax revenue in the long term must be avoided.
• To achieve the investment the country needs in health, education and infrastructure, a tax reform is necessary to reduce informality and, above all, to break free from the trap of low economic growth.
• To reverse the economic slowdown, it is necessary to address the internal factors that explain the decline in investment.
• It is very positive that mixed-capital projects are being designed for infrastructure construction. Considering the limited fiscal space, this is the only realistic way to develop the infrastructure the country needs.

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