Stimuli for gasoline prevented Banxico from increasing its rate to 12%: Yorio

Los fiscal stimulus that have been granted to gasoline, and that have already had an impact on tax collection, have prevented the Bank of Mexico (Banxico) further increase its interest rate and, therefore, the cost of money, indicated Gabriel YorioUndersecretary of Finance and Public Credit (SHCP).

During the quarterly press conference to present the Report on the Economic Situation, Public Finances and Public Debtthe official highlighted that these stimuli, which are estimated at around 1.4% of the Gross Domestic Product (GDP), have prevented the interest rate from increasing to 12%, instead of 9.25% where it currently stands.

“I would like to emphasize that the fuel subsidy does not represent a budgetary imbalance for public finances, since we estimate that the additional income from collection, such as the profits obtained from the sale of oil from the public sector, will compensate for the lower collection from the stimulus to the IEPS”, he declared.

Fiscal stimuli, he added, have also prevented the inflation reach double-digit levels, between 12 and 14 percent.

“(The stimuli) have helped the private sector, in terms of interest rates, and the public sector in terms of not facing a higher interest rate and a significant financial cost, but in the case of the benefit to families , is that when there is a shock in the price of energy, what usually happens is that since people cannot stop consuming them, what they do is that they cut their consumption”, he indicated for his part Rodrigo Marshalhead of the Economic Planning Unit of the SHCP.

In the case of the growth of the economy, Yorio González commented that due to the latest data revealed by the National Institute of Statistics and Geography (Inegi), the growth floor is 2.4%, in line with the estimate they have from the dependency in charge of Rogelio Ramirez de la O.

He did not even rule out that growth at the end of this year may be above the estimate; however, he stressed that the function of the Ministry of Finance is not to generate projections about the economy.

Oil left 35.8% more

Between January and September, the oil revenue had an annual increase of 35.8%, accounting for 1 billion pesos, reported the Report on the Economic Situation, Public Finances and Public Debt.

This performance was explained by a higher oil price, which on average went from 60.7 dollars per barrel (dpb) between January and September 2021 to 92 dpb in the same period of 2022”, explained the SHCP.

Meanwhile, the tax collection it stood at 2.89 trillion pesos at the end of September, which registered an annual decrease of 0.5% in real terms.

The annual contraction in tax revenue is a consequence of the tax incentives on the Special Tax on Production and Services (IEPS) on gasoline.

In this sense, the collection of the IEPS was 60,395 million pesos between January and September, a drop of 82.3% in annual comparison.

The collection of Income Tax (ISR) was 1.74 billion pesos, an annual increase of 14.5 percent. Meanwhile, the collection of the Value Added Tax (VAT) was 944,223 million pesos, which is an annual increase of 1.8%.

For its part, the total income of the public sector grew 4% annually, at the end of the ninth month. In January-September, 4.8 billion pesos were recorded.

Spending grew 3.5%

At the same time, the SHCP reported that the total expenditure of the budgetary public sector was 5.2 billion pesos, an annual increase of 3.5% at the end of the third quarter of the year.

Primary spending was 4.6 trillion pesos in the referred period, with which the annual increase was 2.8 percent.

Within primary spending is programmable spending, which accounted for 3.8 trillion pesos at the end of September. This meant an increase of 1.7% compared to the same period last year.

valores@eleconomista.mx