2023-09-14 16:25:21
The economic package for 2024 foresees a primary deficit of 1.2 percent of the Gross Domestic Product (GDP).
This primary deficit contrasts with the surplus estimated for 2023 of 0.1 percent.
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Thus, from a surplus of 25 thousand 635 million pesos in 2023, the primary balance would be moving to a deficit of 429 thousand 6 million, show the General Criteria for Economic Policy (CGPE) of 2024.
The primary balance is the difference between the total income of the public sector and its total expenses, excluding the financial cost of debt.
That cost could end up this year at 3.4 percent of GDP and in 2024 at 3.7 percent.
César Castro, director of Economic Analysis at the consulting firm DARSI, attributed the primary deficit to higher public spending, which will be 26.2 percent of GDP in 2024, compared to 25.0 percent the previous year.
The acceleration of spending occurs every six-year term, but on this occasion fiscal discipline would be violated, he said.
The advance in spending is due to the commitments made in social matters, such as pensions, and in infrastructure (Dos Bocas and Tren Maya), he explained.
Castro commented that the next Government would have to make an approach of austere spending combined with a greater tax burden, but a tax reform is unpopular.
In addition, it will have to face pressures on the exchange rate and interest rates, he said.
For Gabriel Farfán Mares, professor of public finance at Georgetown University in the United States, if the deficit forecast of 1.2 percent of GDP for the primary balance of 2024 is met, it would be the highest in more than 30 years.
The issue is that there is no way to return to surplus because there is no operating surplus of the Bank of Mexico and there are no signs of a fiscal reform or new taxes, and the stabilization funds have few resources, he warned.
In fact, the CGPE estimate that the average price of the export mix will drop 17.5 percent in 2004 compared to that considered in the 2023 Income Law.
In this sense, the rule says that in the event of a drop in the price of oil greater than 10 percent compared to the price of the previous fiscal year, it is possible to incur a budget deficit to compensate for the decrease in oil revenues, hence an estimated public deficit of 4.9 percent of GDP and a primary deficit of 1.2.
The above is based on article 11 of the LFPRH Regulations.
In this context, a public deficit level of 4.9 percent of GDP is proposed for 2024, with which it is expected to reach a primary deficit of 1.2 percent of the product and a level of Public Sector Financial Requirements of 5.4 of GDP.
An annual real GDP growth rate of 2.6 percent is considered for public finance estimates, with the objective of having a prudent budget revenue scenario, indicate the CGPE.
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