Mexico’s External Debt: Who does Mexico owe? and how much?

The public debt can be internal and external. Here we present some data about the debt contracted by Mexico with international actors. For example: to the United States we owe almost 4 out of every 10 dollars.

The public external debt of Mexico amounts to almost 200,000 million dollars, which represent 18% of the total size of the Mexican economy measured through the Gross Domestic Product ( GDP ). The country’s external debt is financed mainly by private creditors. The United States is the most important, with 37% of the total, according to figures from the Ministry of Finance and Public Credit (SHCP) to September 2018.

What is the public debt?

It is known as public debt to all the insolubles obligations that are in charge of all the institutions and organisms that make up the Public Sector of Mexico, generated by the internal or external use of credit requested by the nation .

The public debt can be internal, when the credit is granted by financial agents in the domestic market through the placement of government securities or direct credits with other institutions, it is always financed in national currency.

External public debt includes loans granted by agents or financial entities abroad, in foreign currency and payable outside the country.

How can you contract external credit?

1. In the capital market: through public placements of bonds, promissory notes or commercial paper in the international capital markets.
2. International financial organizations: loans contracted with institutions such as the IDB (International Development Bank), IBRD (International Bank for Reconstruction and Development) and IFAD(International Fund for Agricultural Development).
3. With foreign trade: through loans granted by the governments of other countries, issued by its Central Banks or by commercial banks with the guarantee of an official body.
4. In the banking market: resources are obtained directly financed by commercial banks.
5. Debt restructuring: financing that has already been negotiated in various programs in order to reduce the balance of the debt or adjust its payment.
6. Pidiregas: movements of direct debt, related to Long Term Productive Infrastructure Projects, also called with the acronym Pidiregas.

Where does Mexico get the most credit?

The main source of external financing for the country is the issuance of bonds in the capital market. This classification represents 80% of the total external debt, following figures from the SHCP.

Source: El Economista

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