Mexico hits its 2026 fiscal targets by spending less, not earning more

Mexico is meeting its 2026 fiscal targets by leaving money unspent rather than by collecting more, according to the finance ministry's third-quarter public finance report. Budget revenue reached 6.304 trillion pesos between January and September, down 2.8 per cent in real terms year on year and almost 240 billion pesos below what the revenue law projected for the nine months.

The shortfall came from two directions. Income tax collection fell 5.3 per cent in real terms, its worst result for a comparable period since 2009 and 137 billion pesos under target, which the finance ministry attributed to lower annual corporate filings in March. Oil revenue dropped 21.5 per cent, which the ministry blamed on a high 2025 comparison base when the federal government made an extraordinary capital injection into Pemex to cut its debt. Value added tax rose 12 per cent, the strongest gain since 2021 and 144 billion pesos above plan, offsetting the income tax decline.

The revenue gap pushed the budget deficit up 18.6 per cent to 969 billion pesos, though that was still 244 billion pesos below the forecast. Public spending slipped 0.4 per cent to 7.273 trillion pesos against a programmed 7.756 trillion, leaving 483 billion pesos unexercised. Physical investment reached 638 billion pesos, up 8 per cent in real terms, and jumped 60.5 per cent in September alone, the largest rise for that month since 2013, but remains below earlier years and has not recovered from a 32.5 per cent fall in 2025.

The finance ministry said tax collection grew for a fourth consecutive year over January to September, with mixed results across taxes, and linked the VAT gain to domestic consumption and stronger tax administration. The overall picture is one of fiscal discipline delivered through underspending, with spending restraint doing the work that higher revenue has not.