México, at risk of having a public deficit of -3.6% in 2023, the highest in 16 years: México Evaluates

México is at risk of having a public deficit of -3.6 percent in 2023 it would the highest amount in the last 16 years warns the organization México Evaluates in an analysis to Economic package for next year.

According to the analysis, the public deficit —higher spending than budget revenue— began in 2008, when it was -0.1 percent. For 2009, it rose to -2.2 percent.

Already in this six-year term, it was -1.6 percent in 2019 —the first year of Full government of Andrés Manuel López Obrador—, in 2020 and 2021 it was -2.9 percent, it is expected to be -3 percent in 2022 and could reach -3.6 percent in 2023.

This last percentage would be the highest in the last 16 years. During this period, the highest was that corresponding to 2015, when it stood at -3.4 percent.

México Evalúa warns about the possibility of lower government revenues and higher indebtedness while questioning the effectiveness of the current administration’s austerity policy.

“It must be said clearly: the current administration has not represented a change in the country’s fiscal structure compared to previous six-year terms. With everything and the control and the supposed ‘republican’ and later ‘Franciscan’ austerity, it was not possible to change the deficit structure of public finances compared to past administrations”, says the organization.

“Another way of looking at the 2023 panorama is that for the first time in this administration, an increase in the Historical Balance of the Financial Requirements of the Public Sector (SHRFSP), the broadest measure of indebtedness, is proposed,” he adds.

One of the controversial measures of the federal government has been the gasoline subsidy which has generated less collection from the Special Tax on Production and Services (IEPS).

According to the federal government, this lower collection has been offset by higher oil revenues, but various analysts question whether this is the case.