Physical investment spending faucet remains closed; falls 0.6% to 222,610 million pesos

The key to spending on physical investment remains closed. According to the latest data from the Ministry of Finance and Public Credit (SHCP), in the first four months of the year the resources allocated to this item fell in their annual comparison.

In total, from January to April of this year the federal government allocated 222,610 million pesos, a decrease of 0.6% compared to the same period last year.

With this, physical investment, which is considered one of the important expenses to promote growth and development, by creating jobs, string two consecutive years with decreases in spending in the first four months of the year.

Although physical investment has fallen, it is already above the levels recorded prior to the pandemic.

In 2019, infrastructure spending totaled 211,216 million pesos in the first quarter of the year; however, it continues below the levels seen in the six-year term of Enrique Peña Nieto.

Expenditure on physical investment refers to the resources that are destined for the acquisition of movable, immovable and intangible assets, which includes the purchase of buildings, furniture, equipment of a diverse nature, computer systems, vehicles and transportation equipment, among others. others, as well as allocations for public works and productive development projects.

Investment in Pemex grew

In the breakdown of the information, it was observed that the physical investment resources allocated to Petróleos Mexicanos (Pemex) were the ones that, in the period, observed a greater increase in their annual comparison.

According to data from the Treasury, in the first four months of the year the government allocated 146,815 million pesos in the period, which meant an annual increase of 11.7 percent.

By government functions, economic development had infrastructure spending of 132,865 million pesos, which meant a growth of 6.4 percent.

Within this function, resources are considered for spending on fuel and energy infrastructure, as well as for the agricultural, transportation, tourism, and communications sectors, among others.

Meanwhile, in social development, the government allocated 84.685 million pesos, 4% more than a year ago. In this area is where the government allocates resources for the infrastructure of environmental protection, housing, education, health, social protection, among others.

In contrast, in the function of government a decrease was observed in annual comparison. From January to April of this year, resources totaled 5,059 million pesos, 71.3% less than a year ago. In this area, the money is destined to the infrastructure of legislation, justice, national security, financial matters, among others.

The tool to boost

In recent days, the Organization for Economic Cooperation and Development (OECD) highlighted that, in addition to social spending, investment spending is one of the important items in the budget to promote the reactivation of the economy, especially now that the recovery after the global crisis by Covid-19.

The ongoing recovery and medium-term growth prospects could be strengthened by increasing public investment, based on a cost-benefit analysis, and targeted spending on social programs.

For this year, according to the Federal Expenditure Budget (PEF), 982,287 million pesos were approved for investment spending, this is 14.3% more than what was approved for 2021.

Of this amount, 87.9% will be used for physical investment in the budget; 10.9% to financial investment and 1.2% to subsidies for the social sector and for the states and municipalities.

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