Aware of the most recent data from the Mexican economy at the end of last year, as well as the downward revisions in the growth forecasts for Mexico by various organizations, to which is added a fourth wave of infections caused by the Omicron variant, analysts find it so difficult to comply with the macroeconomic framework proposed by the Ministry of Finance and Public Credit (SHCP) for this year.
According to the General Economic Policy Criteria, the government expects the economy to expand by the end of 2021 at a rate of 6.3%; recent data from the last quarter of 2021 indicates that the growth of gross domestic product (GDP) is only 5.00 percent. Meanwhile, for this year, the Treasury forecast is for a 4.1 percent growth.
In this sense, James Salazar, Deputy Director of Economic Analysis at CIBanco, indicated that the 4.1% estimate looked fairly optimistic from the outset, but given an expectation of lower growth than expected in 2021, the projected rate for this year is reached. with a lower basis for comparison than thought.
“It still looks very optimistic, but it can not yet be ruled out because we no longer have information that momentum was lost in the last quarter of 2021. This will be difficult to achieve. “Most of the indicators are not going to be met, but in the case of GDP I will not throw in the towel,” said the analyst, who recalled that a stronger recovery was seen in the United States, which could have a positive effect. have. impact in mexico ..
“The big mistake that was made was media. In the middle of the year, after we passed the third wave, the central bank presented in a report three scenarios, where they talked about a growth rate for 2021 of about 6.00%, and the treasury hung on to it for its estimate of last year, and by November and December it started to change, ”recalls Luis Pérez Lezama, director of economic research at Saver ThinkLab.
Impact on finances
Lower-than-expected growth leads to lower domestic consumption, which affects the collection of Value Added Tax (VAT) income, in addition to the generation of less fixed investment which generates jobs and thus the payment of Income Tax (ISR) influence. explains Raymundo Tenorio, professor at Tec de Monterrey.
The foregoing, he added, also affects public spending as it is with this income that it is resolved and, by not achieving the goal, spending cuts in some items and / or dependencies can be proposed.
Last Tuesday, Raquel Buenrostro, head of the Tax Administration Service (SAT), assumed that tax revenues this year would be affected by the Ómicron variant, as well as by high levels of inflation.
“When the forecasts for the 2022 Revenue Act were made, the Omicron and the high inflation we see were not taken into account. Many countries, fortunately Mexico among them, have a large percentage of vaccinated; in the United States and Europe, however, there is a large percentage of unvaccinated (…) these countries, with a smaller vaccinated population, are hit harder (by the virus) and it affects foreign trade and, although we do not suffer the same crisis us in relationships, ”he declared at a press conference.
According to the government’s projection, 7.08 billion pesos of revenue is expected this year, of which 3.9 billion will come from the payment of taxes by taxpayers.
“Short” with inflation
As for the other variables of the macroeconomic framework, the 3.4% inflation forecast for the end of this year is “deficit”, analysts said, as inflationary pressures in the commodities segment continue, and there is still no complete recovery is not. activities, especially in the service sector, whose recovery has lagged behind.
“They expect a very low level of inflation. They kept what Banxico had at the time (before the delivery of the 2022 Economic Package, in September) and Banxico had already adjusted its expectations. “It looks very difficult for inflation to fall below 4% this year,” said James Salazar.
As for the exchange rate, he added that depreciations of the peso against the dollar could be generated, especially in the second half of the year due to the expectation of a tightening of monetary policy by the United States Federal Reserve, which could leads to exceeding the 20.4 pesos per dollar estimated by the SHCP.
Another variable that will not be met is the price of a barrel of oil, which may leave more revenue, but may not be enough in the event of a drop in tax revenue. According to the Treasury, the Mexican blend is expected to sell for $ 55.1 a barrel; however, it can average between $ 60 and $ 65 per barrel.
Reference-www.eleconomista.com.mx