Drop In Taxes Highlight Fiscal Failings

BMI View: Despite the slight improvement in Mexico's nominal fiscal deficit in February, which narrowed from US$19.0bn in January to US$8.1bn, the 3.4% y-o-y drop in tax revenue - the largest on record - supports our bleak fiscal outlook. With expenditure still well up from 2008 levels, we hold to our end-2009 nominal deficit target of 2.5% of GDP.

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