Mexico | The 2021 Economic Package: Opportunity for countercyclical policy

Summary

This week the Ministry of Finance released the fiscal package that he presented to Congress for next year. It is the third presented by this administration. I think it is positive that, after three fiscal packages, it can be confirmed that it is a government committed to maintaining fiscal balances.

Key points

• Key points:
• For this budget, unlike the previous two exercises, the assumptions used to design the budget are more optimistic than the market consensus
• I think that, for credibility reasons, it would have been better for the Ministry to take assumptions closer to those of the market consensus
• I believe that an opportunity is being missed to implement a counter-cyclical fiscal policy that helps the economy recover in a better way from the serious crisis that the country is going through as a result of the pandemic
• An expansive fiscal policy could be accompanied by an announcement of a fiscal reform that begins to attack the chronic problems of low collection that Mexico has

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