No Let Up For Fiscal Deficit

BMI View: After a slight improvement in Mexico's fiscal accounts in February, March witnessed a huge nominal deficit of MXN38.3bn, with the primary surplus falling to its lowest level since January 1994. Public capital expenditure continued to expand at a rapid clip, and with tax receipts also coming off the boil, we hold to our view that 2009 and 2010 will be bad years for the country's fiscal books, projecting deficits of 2.5% and 2.1% from just 0.1% in 2008.

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