Political Risk Latin America Blog @PolRiskLatam

Politics behind Mexico’s budget

Posted in News and Articles, Political Risk by politicalrisklatam on November 17, 2010

by Adam Thompson for Financial Times – Beyond Brics, November 17th, 2010.

Mexico’s spending budget for next year, which the country’s Senate approved this week, is interesting not so much for the numbers it contains but rather for the politics that lie behind them.

The loser this year in all of the inter-party skirmishes that took place to carve up the pie was the federal government. First, opposition forces added about 60bn pesos to the proposed budget, forcing the administration of centre-right President Felipe Calderón to accept a higher fiscal deficit – equivalent to 0.5 per cent of gross domestic product against the original suggestion of 0.3 per cent – than it wanted.

That was less than welcome news for Mr Calderon, whose administration is trying hard to regain its former rating after two of the world’s three leading credit-rating agencies downgraded Mexico last year (though the country still remains in investment-grade territory). (continue reading… )

 

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