Massive Budget Cuts 2025: Defense and Health Hit Hard, Tren Maya Soars

The 2025 Economic Package is projected to total 9.2 trillion pesos in expenditure. Of this, the public sector's programmable spending is set at 6.5 trillion pesos, representing a real reduction of 3.6% compared to the 2024 Federation Expenditure Budget (PEF). This budget encompasses state secretariats, autonomous bodies, and entities such as Pemex, CFE, IMSS, and ISSSTE.

Defense, Security, and Health: Budget Reductions in the 2025 Economic Package

• Despite security being a top priority for Claudia Sheinbaum's administration, the 2025 Economic Package indicates the most significant cut for the National Defense Secretariat. The projected Defense budget for 2025 is 151,995 million pesos, marking a 43.8% real-term reduction compared to the 2024 PEF.
• The Secretariat of Environment and Natural Resources (Semarnat) is the second most affected, with an allocated budget of 44,370 million pesos, a 39.4% decrease.
• The Secretariat of Security and Citizen Protection, led by Omar García Harfuch, is the third most affected with a budget of 70,422 million pesos, a real reduction of 36.2%.
• The Health sector will also face cuts, with a budget of 66,693 million pesos. Despite Sheinbaum's calls for improvements to Mexico's system, this budget marks a 34% decrease from the 2024 PEF.

Sedatu and Tren Maya: Beneficiaries of the 2025 Economic Package

• The Secretariat of Agrarian, Territorial and Urban Development (Sedatu) is the most benefited in 2025, with a budget of 38,048 million pesos, a 183.3% increase from the 2024 PEF. This is part of one of Sheinbaum's key national programs, Housing for Well-being.
• The Secretariat of Infrastructure, Communications and Transport (SICT) is the second most benefited, with a budget increase of 57.6%, totaling 140,799 million pesos. One of the president's priority tasks for them is the repair of “Bachetón“ roads.
• The National Electoral Institute (INE) also benefits with an 18.5% real-term increase, receiving a budget of 40,476 million pesos. The INE will oversee the extraordinary election of ministers, judges, and magistrates in 2025.
• The Federal Electricity Commission (CFE) will receive 545,471 million pesos, a real increase of 6% for a historic investment in generation, transmission, and distribution.

Railway Projects Prioritized in the 2025 Budget

Railway projects will be President Claudia Sheinbaum's most important focus in 2025. The proposed Federation Expenditure Budget (PPEF) for the coming year prioritizes investment in railway infrastructure. According to the PPEF's General Criteria, key infrastructure projects will receive a total of 189,000 million pesos. Of this, 149,000 million pesos, or 78.84% of the total, are allocated to passenger railway projects.

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