He Economy Package It will be the first major fiscal event of the government of Claudia Sheinbaumbecause in the first 45 days of the administration they have had to deal with issues inherited from the previous government, stated the Director of economic and financial analysis at Finamex, Jessica Roldan.
The Economic Package will allow us to see the initials of this administration and if the fiscal consolidation that is required will come (…) what we have seen so far is the resolution of issues that they had to deal with, he commented.
From their perspective, it is not feasible to expect that the 2025 Package will present a correction to the fiscal deficit of 3.5% of GDP next year, like the one committed by the previous government, because there is greater rigidity in spending, due to the even constitutional changes that they imply. that more budget is needed in a scenario where income will not increase. In Finamex They anticipate a fiscal deficit of 4.1% of GDP, but accompanied by a narrative that allows for a more gradual consolidation. For the expert, it will be as important as the fiscal deficit to review the primary deficit that includes the public investment budget, to confirm that indeed, there will be no more spending on the projects of the previous administration.
The director of analysis for Latin America at Moody’s Analytics agrees with her, Alfredo Coutinowho expects a reduction in the deficit but not due to permanent factors. On this occasion they will not have to consider the budget of autonomous bodies, nor funds, nor investment in infrastructure. The problem will come for the 2026 deficit, he noted.
The problem will come in 2026, because the Secretary of the Treasury has already explained that social spending will not decrease, Coutiño said.
Both experts were speakers at the Bloomberg Online Forum 2024, in a session dedicated to the topic “an economy in transition”, a session they shared with the General Director of Afore Banorte, David Razzu.
Cycle of cuts in the Mexican rate will continue
About the monetary decision of the Bank of Mexico, scheduled for this Thursday, November 14agreed that a new rate cut of 25 points will be presented. And “given the composition of the Governing Board,” they expect that there will be an additional adjustment of another quarter point, which will leave the rate at 10 percent. They refer to the dovish inclination of the majority of the five members.
From Coutiño’s perspective, the rate easing cycle in Mexico has been too rapid. So far this year, Banxico has cut the rate three times, in March, August and September. If their forecast is correct, the November cut will be the third consecutive and the fourth of the cycle, which would take the rate from 11.25% to 10.50 percent.
Regarding the volatility of the exchange rate, they agreed that it will prevail at least until inauguration of Donald Trumpand that their decisions on migration and trade will be determinants of the Mexican peso, which is the main thermometer of the financial market.
For Coutiño, the mexican peso It incorporates a correction since July that has no turning back, that is, it will hardly return below 20 pesos.
