On Tuesday, at the national meeting of the Revolutionary Institutional Party (PRI) in Ixtapan de la Sal, State of Mexico, Treasury Secretary Luis Videgaray announced that President Enrique Peña Nieto will present a proposal to Congress to reduce the public deficit through cuts to public spending. The goal of the proposal, according to Videgaray, is to maintain financial discipline without raising taxes.
Videgaray said that thanks to the tax reform of 2013, Mexico was able to survive the drop in oil prices and the depreciation of the Mexican peso without major economic disturbances.
“The tax reform allowed us to preserve economic stability and protect economic growth,” he said. “Saving increased, informality did not increase, and the informal market was not damaged.”
Videgaray said that the president’s proposal will be realistic, with conservative growth expectations, with the goal of achieving a primary balance surplus for the first time in almost a decade.
“The proposal will not include any changes in the tax system,” Videgaray added. “The president will keep to his word when he promised not to ask congress to raise taxes in 2013.”
Peña Nieto’s proposal will contain a series of initiatives to promote entrepeneurship, financial technology and voluntary savings, and to simplify the process of paying taxes, especially for small and medium companies.
Videgaray said that thanks to President Peña Nieto’s actions during the first part of his mandate, Mexico has “very stable finances” and its GDP has an annual growth rate of around 3 percent per year. In spite of an adverse international economic environment, Mexico has good employment rates, low inflation, declining informal labor and increasing income for workers.
Videgaray promised that the increase in gasoline prices this Thursday will be the last of the year, and said he will request that Congress free oil prices sooner than Jan. 1, 2018, as was previously planned.