Mexico will borrow heavily in 2024

Significance

Despite the unprecedented amount, demand for the bonds was substantial at USD21.3bn. The government has forecast a public sector borrowing requirement equivalent to 5.4% of GDP in 2024, the highest figure since 1989.

Impacts

• Increased public spending should prompt a short-term lift to economic growth.
• A debt crisis akin to those seen in the 1980s and 1990s is highly unlikely, even if Pemex requires a massive financial rescue.
• While the fiscal deficit will expand greatly in 2024, the current account imbalance is expected to remain moderate.