Mexico approved a general budget for 2021 that is “conservative and unchanged in (fiscal) policy” that includes risks of a “weaker recovery,” the International Monetary Fund has warned (International Monetary Fund).
Specialists in International Monetary Fund “Without additional financial support beyond that included in the 2021 budget plans, the expected financial contraction could slow down the recovery, whose pace and scope remain uncertain,” they said.
When updating the Financial Monitor report, the organization’s fiscal specialists predicted that Mexican government debt would close in 2021 at 63 points. Gross Domestic Production (Gross Domestic Product), the same level it was at the end of 2020.
They expected the Mexican fiscal deficit to reach 3.4% of GDP at the end of 2021, which is lower than the level reached in 2020, which averaged 5.2 points of GDP.
During the presentation of the report, the Director of Fiscal Affairs at the International Monetary Fund, Vitor Gaspar, explained that the fiscal responses implemented by the vast majority of countries in 2020 to save lives, facilitate livelihoods, and mitigate the effects of the epidemic on consumption and production. Public debt And the Global deficit.
The body appreciates that Global Public Debt It reached 98% of GDP at the end of 2020, which is 14 points higher than the level at the beginning of last year, which was 84% of GDP.
It expects that by maintaining fiscal stimulus this year, as recommended, it will World debt It will reach 99.5% of GDP. Now, they have added another proposal to countries: create credible financial frameworks in the medium term, especially when debt is high and financing terms tight or at risk. But this was not, and will not be, in Mexico
Debt grows without help
According to information from the International Monetary Fund itself, Government of Andres Manuel Lopez Obrador Giving one of the most modest fiscal stimulus packages in 2020 at 0.7 points of GDP, close to that of Uganda
Both are among the governments that provided the least strong financial support in a list of 97 countries.
Despite this limited support for households and businesses in Mexico, the government debt set by the International Monetary Fund increased by 10 points of GDP during the year 2020, the year of the pandemic.
Increase in Mexico’s debt in 2020, This is explained by the effect of a lower exchange rate, as 30% of the debt is contracted in foreign currencies, as explained separately by BxMás chief economist Alejandro Saldana.
The strategic expert explained that despite an increase in the budget approved by the federal government for the health sector this year, which targets the provisions of the International Information Management System (IMSS) and ISSSTE, there is no classification that can determine a path around the resources that the government will allocate for purchase. Vaccines.