Is Mexico in Debt? Analyzing the National Debt
Unpack the complexities of Mexico's national debt. Gain insight into how a country's financial obligations are measured and compared.
National debt represents the total financial obligations a government owes to its creditors, including individuals, businesses, and other governments. This debt accumulates when government spending exceeds revenue, leading to budget deficits financed through borrowing. Mexico, like most nations, carries a national debt. Understanding this debt involves examining its current size, structure, and key financial indicators.
Current State of Mexico’s National Debt
Mexico’s national debt, specifically the historical balance of the public sector’s financial requirements, reached approximately MX$17.67 trillion (US$942.4 billion) as of May 2025. This figure represents the broadest measure of the country’s financial obligations. This balance reflects an increase compared to the previous year, with notable annual growth.
The increase in debt has been influenced by various factors, including financial costs and the need to fund public spending. Domestic debt alone grew by MX$1.5 trillion compared to April 2024, alongside an increase in external debt. This indicates a sustained rise in Mexico’s overall debt burden.
The Ministry of Finance and Public Credit (SHCP) reports these figures, highlighting that the debt level is currently at an all-time high. The magnitude of the debt underscores the ongoing financial commitments of the Mexican government.
Understanding Mexico’s Debt Composition
Mexico’s national debt is primarily public debt, encompassing the financial obligations of the federal government and state-owned enterprises. This public debt is broadly categorized into domestic and external components. Domestic debt is owed to entities within Mexico, such as Mexican banks, pension funds, and individual investors. External debt is owed to foreign creditors, including international financial institutions, foreign governments, and foreign private investors.
A significant portion of Mexico’s public debt is held domestically. Approximately 74% of the debt is held in the domestic market, with the remaining 26% being external. This composition indicates a preference for local financing, which can mitigate foreign exchange risks.
The Mexican government issues various debt instruments to finance its operations and manage its debt profile. These instruments include:
Certificados de la Tesorería de la Federación (Cetes): Short-term zero-coupon Treasury bills, typically maturing in less than one year.
Bonos de Desarrollo del Gobierno Federal (Bonos): Fixed-rate federal government development bonds, with maturities ranging from 3 to 30 years.
Bonos de Desarrollo del Gobierno Federal (Bondes D): Floating-rate bonds with periodically adjusted interest rates.
Unidades de Inversión (Udibonos): Inflation-indexed bonds that protect investors from purchasing power erosion.
Beyond these securities, Mexico also obtains financing from international financial institutions, such as the Inter-American Development Bank (IDB) and the International Bank for Reconstruction and Development (IBRD), as part of its external debt.
Key Metrics for Assessing National Debt
To assess a country’s debt, financial analysts commonly use several metrics that provide insight into its ability to manage and repay obligations. One indicator is the Debt-to-GDP ratio, which compares a country’s total public debt to its Gross Domestic Product (GDP). GDP represents the total value of all goods and services produced within a country. A lower Debt-to-GDP ratio indicates a stronger capacity to service debt, as the economy’s size provides a larger base for generating revenue.
Mexico’s public debt-to-GDP ratio stood at 49.2% as of May 2025, according to the Ministry of Finance and Public Credit. Other recent figures include 47.7% in September 2024 and 49.7% in December 2024 for government debt. This ratio has seen some fluctuation, reflecting economic performance and fiscal policy decisions.
Another metric is debt per capita, which illustrates the amount of national debt attributable to each person. It helps in understanding the per-person share of the national financial burden. This can be calculated by dividing the total national debt by the country’s population.
The debt service ratio measures the proportion of a country’s income used to cover interest and principal payments on its debt. For Mexico, the debt service ratio for the entire economy is approximately 8%. This indicates the percentage of economic output allocated to servicing debt obligations, which is an important consideration for a country’s fiscal health.
International Context of Mexico’s Debt
Placing Mexico’s national debt within an international context provides a comparative perspective on its financial standing. Mexico’s public debt-to-GDP ratio has been below the average for Latin American countries. In 2024, Mexico’s public debt was 53.3% of GDP, while the average for Latin America was 54.6% of GDP.
Mexico’s debt profile is viewed as manageable due to several characteristics. A significant portion of its debt is denominated in local currency, which reduces exposure to foreign exchange rate fluctuations. The long-term nature of its debt also contributes to stability, spreading repayment obligations over extended periods.
The country’s external vulnerability is further mitigated by its substantial foreign reserves. These reserves provide a buffer against external shocks and help cover short-term external financing needs. These factors collectively contribute to how international markets and credit rating agencies assess Mexico’s ability to meet its financial commitments.