Mexico will change from next year, the direction of their public expenditure. This Saturday, the Government of Andrés Manuel López Obrador has delivered to Congress his proposed Economic Package for 2019, where the budget of the new mexican president is committed to social programs, infrastructure, health and energy. To achieve this, the politician has reorganized the current expenditure of the State and has prevented the growth of the public debt. “There is an observation well at the beginning of austerity”, has been referred to the secretary of the Treasury, Carlos Urzúa, to deliver the project to the legislators. The promise of López Obrador not to increase or create taxes has remained intact.
During the next 15 days, mexican legislators will consider the proposal that estimated a cost of 5.8 billion pesos. Urzúa has recognized that with a global economy little favor, your team has opted for a budget conservative and prudent. “We have to redirect the possible expense to two matters: human capital and public infrastructure”, he said. The priorities of the mexican Government are geared towards the programs that López Obrador has announced in their first 15 days as president. The secretaries of Energy, Defense, Education, Labour, Tourism and Welfare (formerly known as Social Development) have received the most attention in the proposal.
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The vision of López Obrador is shown full body in a project that contributes fully to the promises that the political left did in the presidential campaign. The plan includes 6,000 million pesos to begin construction of the Train Maya, the largest bet in infrastructure. As well as 44.300 million pesos to deliver scholarships to young people without employment and 100,000 million pesos for the universal pension for adults over the age of 68 years. It has also secured resources for the reconstruction slope after the earthquake of 2017 and the construction of roads in states such as Oaxaca and Veracruz. The ambitions of Lopez Obrador for some social programs, however, have remained below the estimates made before winning the presidency.
The new Government estimates that next year Mexico will grow 2%, inflation will be set at 3.4%, the rate of exchange will be located at 20 pesos per dollar and the price of oil will be, on average, 55 dollars per barrel. One of the goals of López Obrador is to recover the oil production to 1.8 million barrels per day —is currently 1.7 billion, in the next 12 months, so that has to be released also this Saturday, the National Plan for the Production of Hydrocarbons. The president has not hidden his desire that Petroleos Mexicanos (Pemex), to take the reins of the energy future of the country. The state oil company has achieved an increase in their budget of 14 per cent, while the agency responsible for overseeing private contracts generated after the energy reforms president Enrique Peña Nieto, the National Hydrocarbons Commission, has suffered a cut of 30%. The project of the airport of Mexico City in Texcoco has been buried, while the construction of an airfield at the air base of Santa Lucia is covered with 15,000 million pesos.
Urzúa has recognized that the adjustment of the wages of the high positions and the reduction of some costs accessories have served to reconfigure the distribution of expenditure. “People think that this reduction in wages is going to give all the earnings spectrum, what is to be done is to reduce the salaries of the president, secretaries, and directors general. All the others are going to stay the same or you’re going to see increased wages. This issue of wages is a matter of social justice, it is not a matter of how to tie it better to the adjustment budget,” he clarified. In addition, the secretary has estimated that the public debt, which rose significantly in 2016, will continue to stabilize in the next year once this year has been a 45% of GDP. “There was a growth of debt very quickly, it was disturbing and in the outgoing Government, is tied up, we believe that not the correct way,” he said.
The deputies mexicans have until 31 December to approve the Economic Package. The Movement of Regeneration Nacional (Morena), the party of the president, has a majority sufficient to pass the economic program of López Obrador without making substantial changes. “This budget is indicative of the direction of the fourth transformation. The document is more political in a country,” said Porfirio Munoz Ledo, chairman of the board of directors of the Chamber of Deputies to receive the proposal.
