**Public Deficit Reaches Record High in 16 Years**
As of August 2024, the public deficit has surged to unprecedented levels, reaching 1.1 trillion pesos, marking a significant 53.6% increase in real terms compared to the same period in 2023. The public deficit occurs when government expenditures exceed its revenues and are measured through the Public Sector Financial Requirements (RFSP). The figures registered in August are the highest observed in the last 16 years.
According to the Public Finance Studies Center (CEFP) in the Chamber of Deputies, the gross public sector debt has also risen annually by 13.6% in real terms, totaling 17.7 trillion pesos. The majority of this debt, around 13.5 trillion pesos, is contracted within the domestic market by the Federal Government, while the remaining amount, approximately 222.5 billion dollars, represents external debt. Of the total external debt, 57.8% pertains to the Federal Government and 39.1% to state-owned enterprises like Pemex and the Federal Electricity Commission (CFE).
Another report from the CEFP highlights that total expenditure reached 5.9 trillion pesos by the end of August 2024, indicating that 65.9% of the total amount allocated for the 2024 Expenditure Budget has already been utilized. Noteworthy is the overspending by Pemex, which exceeded its planned budget by 54.9 billion pesos. In contrast, the CFE had 459.6 million pesos yet to be executed within the referenced period.
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**Secondary Article: Mexico’s Economic Challenges Intensify**
In related economic developments, Mexico faces increasing financial challenges, with analysts predicting a slowdown despite current government measures. The country’s inflation rate in cities like Tijuana has hit a concerning 6.37%, the second-highest in the nation as of September 2024. This inflationary pressure compounds existing issues such as high public debt and low production levels, particularly in state-owned entities such as Pemex.
Victor Rodriguez Padilla, the new head of Pemex, is tasked with navigating these turbulent waters amidst declining oil output and mounting financial obligations. Meanwhile, insurance costs have also sky-rocketed, adding extra strain on both businesses and consumers.
Experts suggest a careful reassessment of fiscal policies may be necessary to curb the rising public deficit and stabilize economic growth. Additionally, external factors like global market fluctuations and geopolitical tensions could influence Mexico’s economic trajectory in the forthcoming months.
Stay tuned with TJGringo.com for more updates on financial and economic news.