Mexico | Gloomy outlook for public finances in 2020 and 2021

Summary

The 2021 Pre-Criteria guidelines for economic policy emphasizes the need to keep fiscal discipline; we think this should be done from a structural perspective to make it possible to boost public spending alongside a credible fiscal reform proposal that increases tax revenue and comes into effect after the sanitary emergency

Key points

• Key points:
• It would be desirable to take a decision to make money transfers to vulnerable citizens in order to mitigate the economic impact of the Covid-19 pandemic
• Our estimations show that the widest definition of public debt would increase to 54.4% of GDP in 2020 and 2021

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