The Ministry of Finance and Public Credit (SHCP) presented the document with the Pre-Criteria 2023 to the Honorable Congress of the Union, where they pointed out that the administration led by Andrés Manuel López Obrador will continue fiscal policy to maintain healthy public finances, continue the decline in debt and increase revenue through the fight against tax evasion and avoidance.
In addition, in the report shared through the official portal they reported that the economic growth forecast would have an adjustment downward, with Russia's invasion of Ukraine and the pandemic caused by COVID-19 as the main reasons.
The Mexican body pointed to the imbalances between supply and demand caused by the pandemic and the “escalation of the geopolitical conflict between Russia and Ukraine” as the reasons that have forced Mexico and other countries to adjust their growth expectations for this year.
The previous forecast by the Ministry of Finance indicated growth of 4.1%, which was approved in the 2022 Economic Package and Public Finance Budget; however, according to the argument published this afternoon of April 1, the imbalances of the pandemic caused “bottlenecks” in the chains global values, as well as shortages in industrial inputs, increases in transport costs and a rise in food and raw material prices, with special emphasis on the energy sector.
Regarding the geopolitical conflict in Ukraine by Russia, the SHCP mentioned that there has been a rise in food and raw material prices; in addition to the fact that the manufacturing sector could suffer from shortages in inputs.
Volatility in the financial market and the impact on automotive production due to the Russian invasion have also been the main factors for decreasing economic growth projection by seven tenths.
They promised “sustainable trajectory” in public debt
Within the executive summary of the Pre-Criteria, the SHCP presumed the strength of Mexico's macroeconomic fundamentals, and therefore maintained that public debt will remain stable during 2022.
“Reaffirming the commitment of the Government of Mexico, the debt will decrease by 1.4 percentage points compared to what was foreseen in the 2022 Economic Package and by 0.4 percentage points compared to what was observed in 2021, to 49.6% of GDP,” said the first part of the statement.
The administration recalled the intention to maintain fiscal and macroeconomic balances. “By 2023, the programmable expenditure paid will remain constant in real terms, which, together with the continuity of priority projects that will directly trigger jobs, will contribute to closing the country's social and regional gaps,” the SHCP said.
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