LatinNews Daily - 19 November 2024

*Mexico’s influential business lobby group Confederación Patronal de la República Mexicana (Coparmex) has called for a revision of the government’s 2025 budget proposal which was unveiled on 15 November. In a statement dated 18 November, Coparmex acknowledges the finance ministry’s efforts to not raise taxes but urges the government to “establish more realistic forecasts which take into account the current economic context of the country”. It also warns that “the [government’s] estimates of GDP growth for 2025, in the range of 2% to 3%, present a discrepancy with the forecasts of diverse specialists, who project growth of between 1.2% and 1.4%”. This discrepancy could make it difficult for President Claudia Sheinbaum’s government to achieve its fiscal goal of reducing the deficit to 3.9% of GDP in 2025 (the deficit is expected to hit 5.9% in 2024). Coparmex also raises concern over spending cuts included in the budget, citing a real reduction in public spending of 1.9% compared with 2024. It warns that this will limit capacity to invest in priority areas such as education, health, the economy, and security. In particular, it highlights a 36.2% cut to the public security ministry (SSPC). It also adds that public investment under the new budget would be equivalent to 2.8% of GDP, warning that this is “far from the target of 5% of GDP which would allow for sustained growth and a strengthening of national infrastructure”. Underlining the importance of a budget that “prioritises economic development with a social focus, ensuring no one gets left behind”, Coparmex concludes that it must “translate to concrete actions which encourage investment, promote competitiveness and guarantee collective wellbeing, without compromising the financial sustainability of the country”.