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Weekly Report - 20 October 2011 (WR-11-42)

MEXICO: Over the first hurdle

The finance committee of the lower chamber of congress approved the income side of the 2012 budget this week. The Partido Revolucionario Institucional (PRI), which is the biggest party in congress, flexed its muscles, forcing the fiscal deficit up from 0.2% of GDP to 0.4% while cutting the forecast rate of growth from 3.5% (proposed by the government) to 3.3%. The priístas were also more realistic about the peso/US dollar rate, cutting it from M$12.20 to M$12.80 but, crucially, they accepted the government’s oil price forecast of US$84.9 a barrel.

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