Mexico needs greater efforts to put its debt on a declining trajectory, the International Monetary Fund said after an Article IV consultation mission to Mexico City in September. The IMF projects economic growth of 1.5% in 2026 and 1.8% in 2027, with external uncertainty remaining the main constraint. It said Mexico’s draft 2027 budget implies a more gradual fiscal consolidation than previously announced and would push public debt to 55.0% of GDP, from an estimated 54.0% at the end of 2026. The fund urged monetary policy to remain moderately tight to secure disinflation. Headline inflation is near the central bank’s target, but core pressures and inflation expectations remain elevated. Geopolitical tensions and El Niño could raise prices and delay a durable return to Banxico’s 3% inflation target until early 2028, while Banxico expects the target to be reached in the fourth quarter of 2027. The IMF also called for stronger revenue mobilization, better spending priorities, greater private-sector involvement, improved financial safeguards and reforms to raise potential growth.