Mexicos external debt did increase to a new historical level: 1.51 trillion in the first half of 2020


The explanation for the 68% increase is mainly due to a valuation effect due to the depreciation of the peso against the United States dollar. (Photo: Jose Mendez / EFE)

During the first half of 2020, the total debt of the country, measured as the Historical Balance of Public Sector Financial Requirements (SHRFSP), had a record of 12.07 billion of pesos, with which it was located in 52.1% of annual Gross Domestic Product (GDP).

According to him quarterly public finance report of the Ministry of Finance and Public Credit (SHCP), the figure obtained at the end of June represents the highest amount since 2000, the oldest year for which data is available. In the same period of 2019, the registration was 10.51 billion pesos, so a 1.51 trillion pesos increase.

According to the Treasury, the explanation in the 68% increase It is mainly in a valuation effect due to the depreciation of the peso against the United States dollar.

However, the agency highlighted that despite the level of Mexicos debt, this continues to be relatively low in relation to what has been seen in other countries, such as Italy, where the total gross public debt exceeds 181% of its GDP; in France, 144%; in Spain, 140%; and in United States, 129%, among other nations.

Registration in the first half of 2020 is the highest amount since 2000. (Photo: Carlos Jasso / Reuters)
Registration in the first half of 2020 is the highest amount since 2000. (Photo: Carlos Jasso / Reuters)

Until the 2013, the country’s total debt had been maintained by below 40% of GDP; however, as of 2014, the year in which he was already ruling Enrique Pena Nieto, started a gradual indebtedness process, which reached its highest point in 2016, when the mount added 48.6% of GDP.

It should be remembered that the President Andres Manuel Lopez Obrador has mentioned that during his government he would do everything possible not to get new debtWell, from his perspective, it is a policy that has not worked for Mexico.

“We continue to maintain that will not increase debt in real terms. We did not increase it last year and this year we want it not to increase relative to GDP. Why we are taking some measures, especially austerity, we are also making the administration more efficient ”, he commented during the press conference on June 6.

In the midst of the panorama released by the SHCP report, Gabriel Yorio, Undersecretary of Finance, explained that lThe evolution of the debt balance is aligned with the fiscal policy objectives for the current year, Besides that an indebtedness above those approved by Congress will not be sought.

(Photo: Presidency of Mexico)
(Photo: Presidency of Mexico)

“We will keep the debt letter in case it is needed later”, due to a outbreak of coronavirus, although he said he hoped not to use it. “We cannot place more debt than has been approved, we would have to return to Congress to approve additional indebtedness“He commented in a press videoconference.

Furthermore, the Secretariat also reported that the total financial cost of the country’s debt amounted to 252,542 million pesos during the first half of the year, compared to 241,371 million that were recorded in the same period of 2019. This figure is made up of outlays for the payment of interest and associated expenses with the internal debt.

A few days ago, data from the National Institute of Statistics and Geography showed that the economy of Mexico registered a historical contraction in the second quarter due to the slowdown in productive activity due to the coronavirus pandemic in the country.

In this sense, the GDP sank 17.3% between April and June, compared to a 1.2% drop in the first quarter of the year, according to preliminary figures released by INEGI. Analysts anticipated a slightly greater fall in the period, of 17.7%, according to a survey by Reuters.


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