Economic Analysis - Consolidation To Continue, But Risks Mounting - APR 2018

BMI View : The government of Mexican President Enrique Pena Nieto will continue budget consolidation efforts in 2018, aided by an upward trend in revenues. However, NAFTA renegotiations and July 2018's presidential election loom as potential threats to Mexico's budget deficit.

  • With fiscal consolidation policies bearing fruit in 2017, we expect 2018 will see the Pena Nieto government maintain a conservative fiscal trajectory.

  • We have revised up our budget deficit forecast for 2017 to 0.6%, from 1.3% previously, as expenditures have fallen more rapidly than we anticipated in the latter months of the year.

  • Narrowing Deficits Show Consolidation Paying Off
    Mexico - Budget Balance
    e/f = BMI estimate/forecast. Source: Banxico, BMI

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