The economy in Mexico surprised positively in the third quarter, despite the government of AMLO's estimate for year-end being dismissed. Public debt increased by almost 5 percentage points as a percentage of GDP, raising concerns about the maneuvering room to reduce the deficit.
In recent statements, Undersecretary Edgar Amador explained that the discrepancy in projections is due to difficult-to-predict variables, such as financial volatility. The government is expected to close the year with the current estimates and may make adjustments to the Debt-GDP projection for the 2025 budget.
The head of the agency, Rogelio Ramírez de la O, had predicted that the debt would be at 48.6% of GDP by September. However, the latest report from the SHCP shows a 10% increase in public debt, reaching 16.73 million pesos, which represents 49.3% of GDP.
Although the level of debt reported in the third quarter exceeds the agency's target, it is expected that the secretary will be able to convince the market to reduce the deficit as part of the government strategy. The actions taken by the secretary will be crucial for credit rating agencies.
During the third quarter of the year, total revenues increased by 3.3% and tax revenues by 5.3%, while oil revenues decreased by 6.1%. Officials assure that the trajectory of debt and the deficit are following the expected course, despite local and external challenges.
The undersecretary also mentioned that the relationship between debt and GDP may vary due to the nominal part of GDP and fluctuations in debt due to exchange rates. Despite the obstacles, the government is confident that the estimates will be maintained.
