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Increased Mexican Budget In 2012, But No Tax Rises

by Mike Godfrey, Tax-News.com, Washington

13 September 2011


The Mexican government’s 2012 budgetary package, which has recently been presented to parliament, includes increased spending and a marginally reduced deficit, but without any changes to taxation.

With one of its main objectives being the maintenance of economic stability and fiscal responsibility, and with official estimates of economic growth in Mexico of 3.5% next year (compared to some 4% in 2011), the government has produced a budget for 2012 which increases total expenditure by MXN3.62 trillion (USD281bn), a 2.5% increase over 2011.

Excluding investment at Petroleos Mexicanos (Pemex), the state-owned oil company, the country’s fiscal deficit is a forecasted MXN36.7bn in 2012, or 0.2% of gross domestic product (GDP), compared to a 0.5% deficit this year. Including investment in Pemex at a maintained 2% of GDP next year, the deficit increases to 2.2%, reduced from 2.5% of GDP in 2011.

For the third year running, the government is proposing no changes to taxation in 2012. Oil revenues, which provide about a third of the government’s income, can be expected to rise substantially next year. Although production will stabilize at some 2.55m barrels a day, and exports at 1.2m barrels a day, average expected oil prices are forecast to increase from USD65 to almost USD85 per barrel.

TAGS: tax | economics | budget | Mexico | oil and gas | revenue statistics

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