Investment in public infrastructure in Mexico advances slowly

Investment in public infrastructure in Mexico advances slowly

Under the objective of recovering this indicator and boosting economic activity, the government programmed a historical expenditure of 1 billion pesos (bp) for investment in infrastructure.

However, investment in infrastructure for hydrocarbons decreased 16.2%, and for education 33.8% in the January-May period. In May alone, this last item was reduced 58.5% so far this year in which students returned to their classrooms, after the covid-19 pandemic.

Of the total of the physical public investment in January-May, the one destined to the management of hydrocarbons absorbed the greater part of the resources with 34.7%, less than the previous year; 45.7%. The one allocated to infrastructure in Education, such as schools, took 0.1%.

The destination of resources for the development of infrastructure for Health, such as hospitals, grew 42%, despite barely absorbing 1.4% of the total expenditure made until May in public physical investment.

Communications and transportation takes 4.3%, and its spending grew 2.9%.

Christopher Cernichiaro, a UAM researcher explained that investment in public infrastructure triggers economic growth, since jobs and purchases are generated during its development and operation, in addition to facilitating the movement of people and goods, which in turn, helps the attraction of private investment.

According to Carlos Morales, director of sovereign risk for Latin America at Fitch Ratings, one of the weaknesses of the Mexican economy continues to be the investment issue.

“We have seen that even before the pandemic, domestic investment was relatively weak, we have seen a number of shocks in the last 5 years, from the trade tensions with the US, then the pandemic interrupted investment decisions, in addition to this The administration has been more interventionist, dissuading investment intentions,” Morales explained in a forum at the end of May.

In the first quarter of 2022, the national GDP grew by 1% compared to the previous three months.



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