Edgar Amador Zamora, Secretary of Finance and Public Credit (SHCP), presented this Wednesday before Congress the Pre-Criteria for the 2027 budget, outlining a scenario of stability that contrasts with external volatility and market doubts. In Amador Zamora's projection, Mexico's economy will grow close to 2% by the end of this year, with moderate inflation this year and reaching Banxico's target of 3% in 2027. A scenario with greater credibility about the central bank's projections that the market does not share, which estimates an inflation rate of 3.78%. Scenarios that contrast with different consensuses among specialists. In detail, the document, presented almost at the end of the day, estimates a growth range for this year of between 1.8% and 2.8%, with a midpoint of 2.3%, well above the 1.4% estimated by the consensus of Banxico's monthly survey published earlier. For 2027, the department projects a slightly higher range, of between 1.9% and 2.9%, with a central growth of 2.4%, also above the consensus expectation, which stands at 1.79%. Due to pressure on fuels, Amador bets that the war in Iran will not last more than four weeks. According to the Treasury, this growth is backed by consumption, employment, and public and private investment in strategic sectors. It reveals optimism from the department regarding USMCA and the fulfillment of the Mexico Plan and the Infrastructure Investment Plan for Development with Well-being. The document also reflects a moderate reading regarding the impacts of the war between the United States and Israel against Iran on public finances. For example, although they estimate that oil revenues could be lower than projected in September, they warn that this effect will be offset by a higher oil price, in a context of supply pressures derived from the conflict in the Middle East. In that sense, the team in charge of the country's public finances adjusted its projection for the oil price to $77.3 per barrel for this year and to $54.7 for the end of 2027. Regarding revenue, although they expect historical growth, they also warn that a moderation is expected compared to what was programmed, associated with the effect of a lower average exchange rate during 2026, impacting the valuation in pesos of goods subject to VAT import tax and the import item. Regarding the exchange rate, in the Treasury they estimate that it will trade at the end of 2026 at 18.40 pesos per dollar and the following year will remain at a similar level around 18.6 pesos. The head of the SHCP, Edgar Amador, and the governor of Banxico, Victoria Rodríguez. Moderate inflation. The Treasury document aligns with the discourse of President Claudia Sheinbaum of moderate inflation despite geopolitical tensions, as its projection also looks more optimistic than the market's. Although the Pre-Criteria consider a higher inflation for this year that goes from 3% to 3.7%, it is above the consensus among specialists, which estimates an inflation slightly above Banxico's target range at 4.2%, although it is in line with the central bank's estimate. Economic specialists assure that there are no conditions to reach that target, while Banxico's room for maneuver is narrowed, which surprised this month with a cut to the interest rate by 25 basis points. This vision is also reflected in private: as LPO anticipated, Amador has minimized in conversations in Washington the impact of the Middle East conflict, estimating it could not extend for many months and thus ruling out greater disruptions in supply chains that could affect inflation. Sheinbaum defended Banxico's decision: 'There are no monetary problems in the country'. Additionally, the Mexican government bets on containing any inflationary impact on fuels through measures such as the activation of IEPS on gasoline, agreements with gas stations, and discounts at Pemex terminals. In that vein, the Treasury estimates that Banxico will be able to achieve its inflation target of 3% next year.
