Fiscal policy in Mexico: a challenge to be addressed

Summary

Mexico is facing important fiscal challenges. On the one hand, its tax collection is very low: tax revenue as a share of the GDP (only 14%) is not only the lowest in the OECD, but it is also low when compared to other Latin American economies.

Key points

• Key points:
• Although public debt as a percentage of GDP – currently at around 45%- does not seem particularly high, there is little room for expansion, as the debt servicing costs are very high.
• The new Administration of President López Obrador has sent out positive signals in terms of his commitment to meet the primary budget surplus targets in order to stabilize public debt.

Geographies

Topics

Tags