Mexico | Risk of a sharp drop in public revenue in 2020
Published on Thursday, May 28, 2020 | Updated on Thursday, May 28, 2020
Mexico | Risk of a sharp drop in public revenue in 2020
Lower tax revenue would lead to a higher primary deficit (ceteris paribus). To meet the primary deficit target of 0.4% of GDP for 2020 under the aforementioned contraction range, the federal government would need to cut down public expenditure by MXN 209 billion and MXN 418 billion in 2020, respectively.
Key points
- Key points:
- Annual falls in real GDP ranging between 7.0% and 12.0% in 2020 would be detrimental to tax revenue, implying a real annual contraction in public revenue ranging between 9.4% and 13.1%
- For the same real GDP annual contraction range, the estimated tax revenue published by the Ministry of Finance in the 2021 General Economic Policy Preliminary Guidelines could decrease between MXN 216 billion and MXN 421 billion in 2020
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