According to the projections of the Ministry of Finance, this balance will close the six-year term of Andrés Manuel López Obrador at 48.8% of the GDP in 2018, the last year with Peña, this balance represented 43.6%, which implies an increase of 5.2 percentage points, the lowest of the last three six-year terms, but the highest proportion of the last 30 years.
On September 8, the SHCP presented its proposal for the 2024 Economic Package, in which it proposes that the historical balance of financial requirements close this and the following year at 49.9% of GDP.
“With respect to public debt, this administration has differentiated itself from previous ones due to its efficient management, managing to maintain a stable and sustainable level in the medium term, despite the volatile global environment. Specifically, it is estimated that at the end of this year the public debt will reach a level of 46.5% of GDP,” explained Rogelio Ramírez de la O, Secretary of the Treasury in an appearance with senators on September 26.
He highlighted that this increase, compared to 2018, Peña Nieto’s last year, is almost a third of the average increase of 8.2 percentage points in GDP observed in the two previous administrations. “The efficient management of public finances has been recognized by the main rating agencies and international organizations, who have highlighted the fiscal solidity and the ability to adapt of the Mexican economy to the challenges posed by the external environment,” added the official.
Although it is expected that the debt will not exceed 50% of GDP, the amounts for the deficit (the difference between spending and income), the debt ceiling, in addition to the payment of interest on it will reach maximums not seen in recent years. more than 30 years.
Given this, rating agencies such as Moody’s Investors Service stated that the increase in the deficit is a consequence of the increase in spending allocated to priority projects of the current government, and that next year’s budget implies a manifest change in the conduct of fiscal policy with respect to what has been observed to date.
Renzo Merino, Mexico’s sovereign debt analyst at Moody’s, explained last week that it is possible that Mexico’s credit rating will be reviewed next year with scenarios for policies that could influence the country’s economic and fiscal outlook.