In 2019, the first year of the current federal government, there was a decline in the economy, and with it a lack of tax revenues that led to the use of fund resources. The same thing happened in 2020, and to date, these resources have not been recovered, even with increases in oil prices in the last two years.
“An issue that we have observed in the last two years is how Mexico has used these benefits from oil revenues, higher oil prices have also coincided, in an elementary way, with higher fuel prices, due to inflation issues. The government’s strategy involved subsidizing the price, which has been reducing in recent months, but we do not know if that will necessarily change in the future,” explained Renzo Merino, Mexican sovereign analyst at Moody’s Investors Service.
He explained that the benefits that Mexico had, due to high oil prices, went to the subsidy issue, and not to “filling the financial cushions that the government had and that were used in previous years, and that could have helped to give a little more fiscal space from now on, especially considering that at any moment there could be a new shock,” the specialist warned on September 27 at a press conference.
Regarding the FEIEF, the Center for Economic and Budgetary Research (CIEP) has warned that in the face of new crises, this fund has insufficient funds to deal with them.
“If the current trend continues, it would possibly be necessary to resort to a new debt acquisition to increase FEIEF resources, but, given the higher interest rates, the financial cost of the same would be put under pressure,” the CIEP warned in an analysis. .