Mexico’s 2027 Preliminary General Economic Policy Guidelines: Out of Touch with Reality

ByArturo Huerta González

This editorial by Arturo Huerta González originally appeared in the April 7, 2026 issue of La Jornada de Oriente, the Puebla edition of La Jornada, Mexico’s premier left wing daily newspaper. The views expressed in this article are the authors’ own and do not necessarily reflect those of Mexico Solidarity Media or the Mexico Solidarity Project.

By 2027, the Secretariat of Finance indicates that the country’s economic management will continue “preserving macroeconomic and fiscal stability.” Fiscal policy will continue to favor the financial sector at the expense of formal job creation, import substitution of gas and basic grains, and endogenous growth conditions that would reduce dependence on foreign sources.

The Preliminary Criteria reiterate the discourse of the previous six-year term that social policies strengthen household incomes, that they “have a redistributive dimension, that they boost domestic demand and generate conditions for sustained growth.” However, the facts demonstrate that this has not happened.

The Preliminary Budget Guidelines do not include policies to address the problems that will arise from the rise in international prices of gasoline, gas, and fertilizers, which will lead to increased prices for agricultural goods and all other goods. According to the Ministry of Finance, this situation will not affect prices in the country, nor the interest rate, the exchange rate, or economic growth. The Preliminary Budget Guidelines project inflation of 3.7% by the end of 2026 and 3.0% by the end of 2027; an interest rate of 6.3% by the end of 2026 and 5.5% by 2027; an exchange rate of 18.40 pesos per dollar by the end of 2026 and 18.60 pesos per dollar by 2027; and GDP growth between 1.8% and 2.8% in 2026 and between 1.9% and 2.9% in 2027.

By promoting import substitution in gasoline, gas, fertilizers, and food, economic activity and employment would increase, the foreign trade deficit would be reduced, and the external vulnerability we have fallen into would be mitigated.

According to the Pre-Criteria, growth will be supported by “a gradual rebound in private investment as companies adapt to the new regulatory environment and the USMCA review process progresses .” They have an optimistic view of this trade negotiation, and the problem is that despite numerous trade agreements, the economy has not grown and will grow even less given the slowdown in the global economy and trade resulting from the US and Israel’s war against Iran.

The Secretariat of Finance acknowledges that sources of volatility associated with geopolitical conflicts persist and that changes in US trade policy are possible, yet it maintains a restrictive fiscal policy. The Preliminary Budget Guidelines project a fiscal surplus (excluding debt payments) of 0.5% of GDP in 2026 and 1.1% in 2027. The Ministry believes there are strengths to face the adverse external environment. However, these strengths do not stem from fiscal austerity, high interest rates, or a weak dollar. These policies negatively impact investment and productive capacity, thus weakening the country’s ability to cope with the volatility associated with conflicts in the Middle East.

The preliminary budget guidelines report that public investment fell by 18.9% in 2025 and private investment by 4.0%, and this downward trend continued into the first two months of 2026, as productive investment in Mexico decreased by 44.9%. This demonstrates that the country lacks the productive capacity to withstand external shocks, both those stemming from the Middle East conflict and those resulting from the review of the USMCA, where the US is expected to take action against Mexico.

The interest rate differential with the US is being maintained to continue promoting capital inflows and further currency appreciation, supposedly to avoid “potential periods of volatility that could arise during the year due to the renegotiation of the USMCA.” The problem is that with high interest rates, there is less viability in advancing self-sufficiency and mitigating the negative impact of product shortages and international inflation.

The 2027 budget allocated by the Secretariat of Finance for railway infrastructure exceeds the amount earmarked for oil, gas, petroleum products, and petrochemicals, demonstrating a lack of vision for achieving self-sufficiency in energy products, which are experiencing rising prices and shortages due to the closure of the Strait of Hormuz in the Middle East. Furthermore, no significant allocations are proposed to boost the production of staple grains and fertilizers, whose international prices have increased by 70%, and whose exports have been restricted by major producing countries, impacting agriculture worldwide.

The government must abandon its policy of fiscal austerity and stop responding to international rating agencies and financial capital. It must act in favor of national production and employment, which will require increasing spending and investment, and ensuring that monetary policy aligns with fiscal policy. This would increase national income and tax revenue. Since the government collects what it spends, this would reduce the fiscal deficit, thus hindering growth and preventing an increase in public debt.

By promoting import substitution in gasoline, gas, fertilizers, and food, economic activity and employment would increase, the foreign trade deficit would be reduced, and the external vulnerability we have fallen into would be mitigated. Significant price increases, exchange rate fluctuations, and sharp declines in the capital markets would be avoided.