Mexico | Lower discretionary spending supports fiscal discipline

Summary

Public revenue in the first semester was MXN 189,558 million (0.6% of GDP) below budget due to lower oil-related income as international prices of a crude oil barrel went down.

Key points

• Key points:
• Tax revenue was MXN 89,710 million (0.3% of GDP) below budget since VAT intake was MXN 101,030 million lower as there was an increase of reimbursements and compensations along with MXN appreciation against the USD.
• Despite public revenue being below budget, the performance of total public spending in the first semester allowed the budget deficit to be approximately MXN 90,272 million below budget.
• The continuous containment of discretionary spending does not seem sustainable to keep fiscal discipline in a context of still relevant oil-related income and higher pressure from social and infrastructure spending.

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