“The economic program for 2024, presented by the current administration in its final year, aims to finish all infrastructure projects and not leave them incomplete for the next federal administration. This is to avoid inheriting unfinished projects, which could create financial pressures”, stated Gabriel Yorio González, the Deputy Secretary of Finance.
The Finance official explained that when large-scale infrastructure projects take a long time, a substantial portion of the budget needs to be allocated to them, even though their execution and implementation may take a considerable amount of time, and they end up unfinished, as was the case with the Mexico-Toluca train project, which incurred additional costs due to inflation.
Yorio González also mentioned that another consideration in the 2024 budget is to include, for the first time, a budget line for Pemex (Petróleos Mexicanos), in order to prevent potential scenarios of volatility and provide reassurance to investors that the authorized budget is in place, allowing the government to meet the repayments that will accumulate in 2024.
Regarding criticism of the 2024 budget for breaking fiscal discipline from previous years, the Deputy Secretary of Finance reiterated that next year’s economic program will maintain the debt as a percentage of GDP at 48.8%. He emphasized that the Mexican economy is much larger and can withstand this level of debt, as it is on a sustainable path. This also ensures that resources are available to complete infrastructure projects.
He added that compared to other countries with higher levels of debt, Mexico will continue to have one of the lowest debt levels in Latin America and among emerging nations.
Regarding the need for tax reform in the next administration, Yorio González believed that the next government will have enough time to consider whether it should push for tax reform, including changes in tax structures and progressivity, so that those with higher incomes pay more taxes while lower-income taxpayers pay less.
The Deputy Secretary of Finance pointed out that the effects of the COVID-19 pandemic, between 2021 and 2023, such as inflationary impact and economic effects on prices, resulted in estimated losses of 150 billion pesos in purchasing power in the budget. This was due to the fact that money had less buying power due to rising prices, and the increase in interest rates exerted significant pressure on financial expenses.
Regarding whether the 2024 economic package has electoral purposes, the Deputy Secretary considered the assertion incorrect, as social programs are universal and enshrined in the Constitution, making them the right of all Mexicans. He added that social programs, minimum wage increases, the regulation of outsourcing, and pension reform have had an impact on reducing poverty, as revealed by the 2022 Income-Expenditure Survey by the National Institute of Statistics and Geography (Inegi).
The Secretary of Finance and Public Credit, Rogelio Ramírez de la O, announced that during the current administration, strategic actions have positioned Mexico as a leading country in the region in terms of sustainable financing mobilization.
An example is the consolidation of the sustainable debt market, through which approximately 722 billion pesos have been mobilized, involving the federal and subnational government, development banks, and the private sector.
The strategy for mobilizing sustainable financing has the potential to mobilize up to 15 trillion pesos by 2030, equivalent to 46% of the current Gross Domestic Product (GDP).
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