Steep Decline in Public Health Expenditure Amidst Fiscal Consolidation Efforts
According to data released by Mexico’s Secretaría de Hacienda y Crédito Público (SHCP) under Edgar Amador Zamora, the country’s public spending on health services experienced an unprecedented 33.6% annual drop in the first two months of 2025 compared to the same period last year.
Key Figures and Context
- Total health expenditure for 2025: 881,083 million pesos (a 12.2% reduction from the 2024 approved budget).
- Spending on health services from January to February 2025: 74,676 million pesos.
- February 2025 health expenditure: 44,405 million pesos (a 33% decrease from February 2024).
This significant reduction in health spending is part of the current government’s fiscal consolidation strategy, led by Claudia Sheinbaum. The aim is to lower the Requerimientos Financieros del Sector Público (RFSP) from 5.7% to 3.9% of the Gross Domestic Product (GDP) by year-end.
Experts’ Perspectives
Mireya Mondragón, an investigator in Public Finance at Ethos Innovación en Políticas Públicas, explained the complex situation: “This year’s budget has seen numerous cuts, and health was one of the most affected. This is partly due to unavoidable government expenses, such as pension spending or debt servicing costs.”
Comparison with Other Spending Categories
- Pension spending in the same period: 268,600 million pesos (a 4.7% annual increase).
- Cost of debt servicing: 161,559 million pesos (a 6.8% increase).
Underspending by the Secretaría de Salud (SSa)
Despite the annual increase in health spending, the SSa’s expenditure fell short of its planned budget by 41.9% in the first two months, according to the Centro de Investigación Económica Presupuestaria (CIEP).
- SSa spending from January to February 2025: 2,784 million pesos (a 13% increase from the same period in 2024).
- Planned spending for the period: 4,208 million pesos.
Mondragón noted, “Initial yearly delays in budget execution are common; however, as months pass, underspending accumulates, leading to a delayed overall budget execution.”
Historically Low Health Spending in Mexico
Mexico’s public health spending has consistently lagged behind international recommendations, such as the World Health Organization’s (WHO) 6% of GDP guideline. By the end of 2024, Mexico’s health spending was only 2.7% of its GDP.
“It’s crucial that health spending aligns with the approved budget, as simply having a budget approved doesn’t ensure timely and proper resource allocation,” Mondragón emphasized.
Call for Fiscal Reform
Various organizations have repeatedly highlighted the need for a progressive fiscal reform to increase public revenues and allocate more resources to essential sectors like health, education, and security.
