LatinNews Daily - 14 February 2023

In brief: Mexico’s 2022 debt, fiscal deficit as forecast

* The international credit ratings agency Fitch Ratings has stated that Mexico’s preliminary 2022 fiscal data is in line with expectations of moderate deficit widening and a slight fall in debt as a ratio of GDP. The agency states that preliminary data shows the 2022 general government deficit reached 3.3% of GDP, up from 3% in 2021 and slightly exceeding Fitch’s forecast of 3.2%. General government debt stood at 46.8% of GDP. Fitch states that it expects the debt ratio to rise to just over 50% of GDP by 2024 “partly due to secular low growth rates and increasing borrowing costs.” It also expects higher fiscal deficits of 3.9% in 2023 and 3.5% in 2024 as the government led by President Andrés Manuel López Obrador seeks to complete priority infrastructure projects before presidential elections in mid-2024. Fitch stated it did not consider that this temporary increase in capital expenditure represented a departure from the “prudent fiscal settings that have characterised this and previous governments”, although noting that higher deficits could put debt as a percentage of GDP “on a gradual upward path”.

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