This chapter critically analyzes Mexico’s fiscal response to the COVID-19 pandemic, highlighting its deviation from global trends of countercyclical stimulus. Under President Andrés Manuel López Obrador (AMLO), Mexico maintained a conservative fiscal strategy characterized by limited deficit spending and a reluctance to accumulate debt. While this approach ensured short-term macroeconomic stability, it also deepened economic contraction and delayed recovery. The chapter situates Mexico’s austerity within broader theoretical frameworks—including Keynesianism, neoliberalism, and political survival theory—while also examining how fiscal restraint functioned as a mechanism for political centralization and democratic erosion. Through an exploration of internal and external drivers, including the strategic renegotiation of debt and reliance on US economic proximity, the chapter reveals how Mexico’s fiscal prudence during a global crisis masked a deeper agenda of political control, weakening subnational autonomy and reinforcing executive power. The Mexican case provides a unique contribution to debates on democratic backsliding, fiscal governance, and the political economy of crisis management.