The financial resources included in the 2023 Economic Package will be insufficient to cover the needs of public spending and meet the social items of health and educationwarned the Center for Economic Studies of the Private Sector (CEESP).
The private body belonging to the Business Coordinating Council (CCE) described the “optimism” of the federal government about the way in which it elaborated the federal budget for 2023since “the sustainability of public finances is of concern” under cheerful forecasts.
“At this point there is a lot of uncertainty in any crude oil price forecast for next year. In fact, as of September 9, the price of a barrel of the Mexican mixture stood at 82.50 dollars, almost four dollars less than at the end of August and 16 dollars below the end of July”, warned the CEESP economic analysts.
Faced with “darker” prospects for most experts, by 2023, official optimism increases, and expects the economy to grow 3%, when the average forecast of specialists anticipates an advance of 1.3%, the agency specified.
The authorities consider that “Mexico will continue to grow and consolidate its economic transformation”, in such a way that “economic activity will continue to show quarterly growth above the historical average from 2011 to 2019, with which there would be an annual expansion of 3% for the entire period. year”.
This reflects the level of optimism with which the government of Andrés Manuel López prepared the macroeconomic framework, where in terms of inflation, the program is also too optimistic in relation to most forecasts.
“When budgets are prepared based on optimistic macroeconomic forecasts, as all governments often do, the public deficit ends up widening, incurring more debt or cutting expenses of less political priority or using budget reserves. The latter is no longer possible because the government exhausted them in previous years”, CEESP warned in its weekly economic analysis.
The government forecasts that next year the total income of the public sector will reach 7.1 trillion pesos, which means an increase of 9.9% in real terms compared to the figure approved for 2022.
The foregoing will imply an 11.6% increase in tax revenues, which will continue to rest on the control of the SATrefers.
“With everything and the expected strong increase in revenue, the resources will not be enough to cover the growing needs of public spending, especially to keep social programs in operation and the government’s flagship projects,” CEESP projected.
Although the fiscal program for 2023 is feasible, there are several risks that, if they materialize, could lead to the need to cut some expenses, which will surely not be a priority for the government. Once again, spending for purposes such as Health, Education, Public Safety and physical investment other than flagship government projects is at risk.
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