Background on Claudia Sheinbaum and her Relevance
Claudia Sheinbaum is the current Head of Government of Mexico City, serving since 2018. As a prominent figure in Mexican politics, her administration has been focused on fiscal consolidation and improving public finances. Her efforts have garnered attention due to the challenges faced by Mexico’s economy, including fluctuations in oil revenues and the need to balance public spending.
Fiscal Performance in Q1 2025
According to the Secretaría de Hacienda y Crédito Público (SHCP), Claudia Sheinbaum’s government successfully reduced the fiscal deficit by 71% in the first quarter of 2025. The Requerimientos Financieros del Sector Público (RFSP) totaled 159,200 million pesos during this period, a significant decrease compared to the same quarter in 2024.
Budgetary Deficit and Surplus
The budgetary deficit stood at 121,000 million pesos by the end of March, which is lower than the planned deficit of 235,000 million pesos. Meanwhile, the primary budgetary surplus registered 182,000 million pesos, exceeding the initial projection by 79,000 million pesos.
Tax Revenue Growth
On the revenue side, tax collections grew by double digits due to improved efficiency and better fiscal enforcement. This growth compensated for the decline in oil-related revenues.
Tax Revenue Details
In the first quarter, tax revenues amounted to 1,522,104 million pesos, marking a 17.8% increase compared to the same period last year and surpassing the planned amount by 37,075 million pesos. The growth was primarily driven by higher revenues from the Value-Added Tax (VAT).
- Income Tax (ISR) grew by 21.3% annually, totaling 901,261 million pesos.
- Value-Added Tax (IVA) increased by 20.9% annually, generating 400,444 million pesos.
- Import taxes rose by 50.5% annually, contributing 42,347 million pesos.
The growth in import tax revenues can be attributed to a higher exchange rate, enhanced enforcement against e-commerce businesses, and strengthened customs surveillance.
Reduced Public Spending
Regarding public spending, the government of Claudia Sheinbaum reported lower and under-spent resources in Q1 2025. Total spending amounted to 2,269,695 million pesos, a 5.9% decrease from the previous year, with an underspending of 178,150 million pesos.
Of the total spending, 1.57 billion pesos went to programmable expenses (goods and services for the population), which decreased by 9.7% annually. Non-programmable expenses (excluding financial costs) totaled 390,616 million pesos, a 1.3% decrease from the previous year.
The financial cost of debt remained 36,000 million pesos below the programmed amount, reflecting a prudent financing strategy amidst restrictive financial conditions and a higher exchange rate.
Key Questions and Answers
- What is the main achievement of Claudia Sheinbaum’s government in Q1 2025? The Mexican government, led by Claudia Sheinbaum, successfully reduced the fiscal deficit by 71% in the first quarter of 2025.
- How did tax revenues contribute to this achievement? Tax collections grew by double digits due to improved efficiency and better fiscal enforcement, compensating for the decline in oil-related revenues.
- What was the growth rate of different taxes in Q1 2025?
- Income Tax (ISR) grew by 21.3% annually.
- Value-Added Tax (IVA) increased by 20.9% annually.
- Import taxes rose by 50.5% annually.
- How did public spending perform in Q1 2025? The government reported lower and under-spent resources, with total spending decreasing by 5.9% annually.
