Por Sharay Angulo
MEXICO CITY, Sept 7 (Reuters) – The Mexican government’s 2021 budget proposal will prioritize health spending amid the global pandemic and projects revenues close to those set in this year’s economic package, without raising taxes. a key lawmaker said in their discussion in Congress on Monday.
Next year’s budget plan, which Treasury Secretary Arturo Herrera will deliver to the Chamber of Deputies on Tuesday, predicts a primary deficit, but also some improvement in the weakened local economy, said the president of the budget commission in the lower house, Erasmo González.
Mexican economic activity plummeted by more than 17% in the second quarter, its worst ever decline, due to the slowdown in productive activities hit hard by the effects of the coronavirus. For all of 2020, analysts forecast a contraction close to 10%.
President Andrés Manuel López Obrador has advanced that the budget for 2021 will be “austere.” However, González pointed out that health spending would grow in real terms, while Mexico accumulates more than 637,500 cases and almost 68,000 deaths linked to the epidemic.
“Definitely the health sector will have a marked share of federal resources,” said the legislator of the ruling National Regeneration Movement party (Morena) in an interview with Reuters.
González stressed, however, that the projected income for 2021 will hardly exceed the 6.1 trillion pesos (282,120 million dollars) budgeted for this year, due to the effects of the virus and the drop in oil prices.
“The conditions of downturn in economic activity bring in advance a drop in tax revenues, and we also have the other component that our economy suffers a lot, oil revenues, which have truly marked the decline in total revenues more severely “, said.
The so-called 2021 Economic Package, which must be approved by both houses of the Mexican Congress before the end of the year, does not contemplate new taxes or increases in existing ones. “We do not expect any kind of surprises, at least in terms of tax increases,” he added.
(1 dollar = 21.6223 Mexican pesos)
(Report by Sharay Angulo, edited by Noé Torres)