Treasury Secretary José Antonio Meade Kuribreña presented his proposal for the 2017 budget to the legislature Thursday afternoon.
Meade only took the reins of the Treasury and Public Finances Secretariat (SHCP) on Wednesday, when previous Treasury Secretary Luis Videgaray suddenly resigned over his role in the controversial meeting between President Enrique Peña Nieto and U.S. presidential candidate Donald Trump.
Meade Kuribreña said that the 2017 budget will have a surplus equivalent to 0.4 percent of Mexico’s Gross Domestic Product (GDP), 0.2 percent higher than the original estimate, which will help to stabilize Mexico’s sovereign debt.
The budget for 2017 includes a reduction in government spending equivalent to 1.2 percent of the GDP, which in 2016 would be around 240 billion pesos ($12.8 billion). The spending cuts will not affect impact investment.
Meade Kuribreña said that the budget is based on economic forecasts for 2017 that show GDP growth of between two and three percent in 2017, an inflation rate of three percent, an average exchange rate of 18.2 pesos per dollar and an average price of $42 per barrel of Mexican crude oil.
Petróleos Mexicanos (Pemex), Mexico’s state-owned oil company, plans to produce an average of almost two million barrels of oil per day in 2017, and to export 775,000 barrels daily. Meade Kuribreña said that the plans for oil production do not take the possible effects of Pemex’s new business plan into account.
The Chamber of Deputies and the Senate will approve the revenue portion of the budget by Oct. 20 and Oct. 31, respectively. The Chamber of Deputies has exclusive authority over government spending, and will approve the budget’s spending portion by Nov. 15.