States and municipalities will have less money for social programs and works

This lower growth in transfers could imply reductions in spending on infrastructure.

However, Moody’s highlights that most Mexican states and municipalities have sufficient liquidity to face projected deficits and maintain low levels of total debt.

In addition, uncertainty about possible changes in United States policies, particularly on tariffs and migration issues, could negatively affect regional economies most dependent on bilateral trade.

“Although our base scenario does not contemplate an economic recession in 2025, there may be a deterioration in the macroeconomy if any of these risks crystallize,” he indicates.

It details that although participations will grow 6%, contributions (labeled transfers) will have a contraction of -0.5%, limiting resources to cover social and public works programs.

And that the protection of the Entity Income Stabilization Fund (FEIF) will be limited, since its resources were used on a recurring basis.