Economic Analysis - Fiscal Consolidation Efforts Paying Off - DEC 2017
BMI View: C onsolidation efforts will see a narrowing of Mexico's fiscal deficit in 2017, as the government reduces capital expenditures substantially. A gradual recovery in the oil sector will support revenues, underpinning our view for less substantial shortfalls over the coming years.
Mexico's budget deficit will see narrower budget deficits in the next few years as the government continues its fiscal consolidation efforts and benefits from steady revenue growth.
We have upgraded our fiscal forecast for 2017 and now expect Mexico's deficit to reach 1.3% of GDP as expenditure growth has been weaker than previously anticipated.
Fiscal Situation Improving Mexico - Overall And Primary Budget Balance, % of GDP f = BMI forecast. Source: Banxico, BMI
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