Public deficit grows by 60% and reaches historic level

According to updated figures from Tax authoritiesIn the first seven months of the year, spending grew 10.8%, totaling 5.334 billion pesos, while income grew only 3.3% annually, reporting 4.440 billion.

In the last year of Andrés Manuel López Obrador’s government, growth in public spending is seen in a larger amount allocated to providing goods and services to the population. Resources for social development registered an increase of 10.5%, the highest on record for the same period.

It was also boosted by the increase in direct investment in infrastructure, which grew by 15.6% in real terms annually, the highest growth for the period since 2014. The observed figure represented 64.6% of the approved annual amount.

Meanwhile, tax revenues rose by 6.1% in real terms, marking four years of continuous growth, in line with the good performance of economic activity and measures to reduce tax evasion and avoidance, the Treasury said in a statement.

VAT revenues increased by 6.2% in real terms annually compared to the same period in 2023, a growth higher than the average of 4.2% over the last ten years. Income from income tax remained practically constant during January-July.

Between January and July, total IEPS revenue increased by 44.8% in real terms annually. Domestically, the observed level of the fuel component was 1.9 times that achieved in the same period in 2023; while the non-fuel component grew by 1.8% in real terms annually.