LatinNews Daily - 13 September 2023

* Citibanamex, the Mexican banking unit of US financial giant Citigroup Inc, has issued a review of the government’s proposed 2024 budget. In a report entitled ‘2024 budget: The end of austerity’, Citibanamex states that the budget appears “designed to win elections and address, at least partially, fiscal realities”. The banking institution states that the “overall philosophy” of the budget is to increase spending on the administration’s flagship social programmes, consolidate the policy vision on strategic sectors and complete flagship infrastructure projects, as well as accommodating “to some extent, some fiscal realities”. Citibanamex warns that the budget will leave the administration that takes over from President Andrés Manuel López Obrador in December 2024 “more constrained and with a difficult fiscal outlook”. According to Banxico, “the biggest surprise” of the budget proposal is “the significant increase in fiscal targets”, with the primary deficit rising from 0.2% in the 2023 budget to 1.2% in 2024 and the broad public deficit rising from 3.9% this year to 5.4% next year. Citibanamex also notes that the finance ministry (SHCP) estimates that broad net debt will close López Obrador’s administration 5.2 percentage points of GDP higher than at the end of the previous administration. “Although its level would remain relatively comfortable at 49% of GDP, the trend would be a cause for concern,” reads the report. The US investment bank Bank of America, representatives from Mexico’s private sector, and the political opposition have also raised concerns about the proposed budget.