From 2017 to 2021, Mexico‘s spending dedicated to servicing public debt, in nominal peso-denominated terms, increased by 28.9%, an average of 6.7% per year.

According to the Mexican government, this increase was mainly due to an increase in interest rates.

In particular, from 2020 to 2021, Mexico’s expenditures dedicated to servicing public debt increased by 0.1% to Ps. 687 billion, mainly as a result of higher interest rates.

According to preliminary figures, as of March 31, 2022, Mexico’s public sector gross external debt amounted to US$225.7 billion, an increase of approximately US$4 billion from US$221.6 billion as of December 31, 2021.

Of this amount, US$217.4 billion represented long-term debt and US$8.3 billion represented short-term debt.

Net external indebtedness decreased by US$0.3 billion during the first three months of 2022.

Debt service

The government’s economic stabilization strategy focuses on efficiently allocating public spending and increasing revenues to reduce the poverty rate and increase employment and the rate of economic growth.

To better promote economic growth and employment opportunities, the main objectives of the government’s fiscal policy are to reduce barriers and risks associated with investment in Mexico, improve the ability of Mexican companies to compete in global markets, and reduce the cost of goods and services for consumers.

Also, the government’s current fiscal policy focuses on fiscal and financial discipline, austerity in spending, avoiding new taxes and tax increases, and curbing tax evasion.

In terms of public debt management, the government plans to maintain a strong and diversified liability portfolio, with a preference for long-term, fixed-rate domestic debt.