Introduction
Governments worldwide typically spend more than they receive from taxpayers. While some countries invest in submarines and international organization contributions, others focus on essential items like water tanks, cement bags, and tablets for distribution. This article examines Mexico’s government spending in relation to its revenue, providing context on why it matters and how it impacts the nation.
Global Perspective on Government Spending
The primary purpose of taxes and government expenditures is to pool these costs among all capable contributors, fostering growth, strengthening the nation, and reducing disparities among citizens. Nordic countries (Norway, Finland, Denmark, Iceland, and Sweden) exemplify successful tax collection and distribution, ensuring public schools and hospitals cater to 100% of the population, eliminating the need for private services.
These nations collect over 70% of their citizens’ income, with societal agreement on this level of taxation. Candidates proposing tax cuts have historically lost elections, demonstrating public support for robust government spending.
Mexico’s Government Spending Under Morena
Since the left-wing party Morena took power, Mexico has spent approximately 52 trillion pesos in recent years. For the upcoming year 2026, the proposed budget exceeds 10 trillion pesos.
According to leading financial institutions, including Mexico’s Secretariat of Finance and Banco de México, the country’s average annual growth under President Andrés Manuel López Obrador has been a mere 0.7%. For 2025, the growth is projected at 1%, with no significant improvement anticipated for the following year.
If these projections hold, Mexico’s 62 trillion pesos of government spending—with 10 trillion pesos in debt—will not surpass a 0.8% growth rate, falling short of the population growth rate and leading to a substantial decrease in per capita wealth.
Assessing Government Spending’s Impact
As Mexico’s economic package is debated in Congress, it’s crucial to question whether the government’s expenditures genuinely contribute to enhancing the wealth of its 135 million inhabitants.
Key Questions and Answers
- Q: How does Mexico’s government spending compare to its revenue?
A: Mexico has spent approximately 52 trillion pesos in recent years, with a proposed budget of over 10 trillion pesos for 2026. However, the country’s average annual growth under President López Obrador has been only 0.7%, with no significant improvement projected. - Q: Why is this comparison important?
A: Understanding the relationship between government spending and revenue is essential for evaluating the effectiveness of public investments in fostering economic growth and improving citizens’ well-being. - Q: How does Mexico’s situation contrast with other nations?
A: Nordic countries successfully collect and distribute taxes, ensuring comprehensive public services without the need for private alternatives. In contrast, Mexico’s growth rate lags behind its population growth, potentially leading to decreased per capita wealth. - Q: What are the potential consequences of insufficient growth?
A: If Mexico’s projected growth remains below 1%, per capita wealth may significantly decrease, exacerbating social and economic disparities.
