In the period from January to September 2024, the financial cost of the public debt was 851 thousand 77.5 million pesos, an increase of 7.1 percent in real terms annually – discounting inflation – compared to the same period in 2023, according to data from the Ministry of Finance and Public Credit (SHCP).
In comparative terms, the expense of commissions and interest on government debt, known as financial cost, exceeds the amount allocated to health and education. In the first nine months of 2024, the government spent 698,334.9 million pesos on everything related to education, while it spent 615,282.7 million pesos on health.
Ricardo Cantú, associate income and debt researcher at the Center for Economic and Budgetary Research (CIEP), commented in an interview that in 2023 and 2024 credit interest rates exceeded 10 percent annually.
Taking on debt becomes very expensive when we have such high interest rates, which will cause the fiscal deficit to reach 6 percent of gross domestic product (GDP) in 2024, which we have not seen since the 1990s
he explained.
He declared that the financial cost of 2024 will represent 3.9 percent of GDP against 3.3 percent allocated to education or 2.9 percent to health.
He mentioned that the public sector has always had liabilities, but the last administration increased them more compared to the governments of the 1990s.
Aftermath of the 2009 crisis
In 2009 the debt began. The budget deficit represented 2 percent of GDP; then it rose in the administration of Enrique Peña Nieto to 3 percent, and then it remained in the six-year term of Andrés Manuel López Obrador, but by 2023 it increased to 4.1 percent
he detailed.
Subsequently, it rose to 5.9 and as a result of the greater debt there is a higher interest cost.
We have never had such a high financial cost, particularly 2022, 2023 and 2024. The deficit rose at the least opportune time
he reiterated.
He explained that the 2009 indebtedness was due to the international financial crisis, which resulted from the sale of mortgage bonds in the United States that lacked solid payment guarantees.
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