“The leaving administration leaves finances weakened. In the first years there was a budget balance, fiscal discipline; During the pandemic, the government decided not to go into debt, to maintain balance, but in recent years we saw the increase in the deficit under the pretext of finishing priority works,” commented José Luis Clavellina, Research Director of the Center for Economic and Budgetary Research (CIEP). .
For this year, this deficit is expected to reach 6% of GDP, and the Treasury plans to reduce it to 3.5%. “That is more or less a trillion pesos, so a cut like this is going to bring problems for the economy, lower spending, a greater slowdown,” added the CIEP specialist.
To begin with, the General Precriteria of Economic Policy anticipate a cut of 706,000 million pesos, of which 94% is expected to be in programmable spending, that is, the money that the government uses to deliver goods and services to the population. , in addition to the operation of public institutions.
Rogelio Ramírez de la O, Secretary of the Treasury and in charge of delivering the 2025 Economic Package to the Congress of the Union, announced in an appearance with deputies of the Finance and Public Credit Commission, this week, that “economies of scale or efficiencies” They will come from the elimination of duplication of functions, the digitalization of processes, procedures and exchange of information between institutions, in addition to the elimination of subsidiaries of state companies; Petróleos Mexicanos (Pemex) and the Federal Electricity Commission (CFE).
Any cut in public spending represents less dynamism for the economy, especially if they are made to public investment projects, since they are what trigger and attract private investment. Already considering lower public spending, reduction in exports and slowdown in private investment, bodies such as the Bank of Mexico, the World Bank and the International Monetary Fund have reduced their expectations for the Mexican economy. Likewise, the Treasury anticipates a slower pace of the economy in the pre-criteria.
For the following year, the projections of these three organizations are between 1.2% for Banxico and 1.5% for the World Bank. While the Treasury foresees a range of 2 to 3%, in Precriteria, and today it will announce whether or not it reduces this range.
“By 2025, the slowdown is expected to continue up to 1.3%, due to the planned fiscal adjustment and a less favorable external situation,” the IMF warned in its latest update for Mexico’s economic projection.
Lower economic growth represents less revenue collection, especially taxes, since they are collected on the profits of companies, the generation of work, which is the case of the Income Tax (ISR); in addition to those that apply to consumption, which are the Value Added Tax (VAT) and the Special Tax on Production and Services (IEPS).
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