Bloomberg News

Mexico Lower House Approves Income Portion of 2012 Budget

October 20, 2011

(Updates with details of the vote starting in second paragraph.)

Oct. 20 (Bloomberg) -- Mexico’s lower house of congress passed the income portion of the 2012 budget, approving a wider deficit than President Felipe Calderon originally proposed.

In a 328-68 vote and 9 abstentions, lawmakers passed the 2012 budget with a deficit equal to 0.4 percent of gross domestic product while maintaining an estimated oil price of $84.9 a barrel.

Calderon had proposed a budget deficit of 36.7 billion pesos, or 0.2 percent of the country’s GDP, excluding investments in state oil company Petroleos Mexicanos.

The bill, which will now go to the Senate, would decrease the official forecast for economic growth to 3.3 percent from 3.5 percent and change the forecast for the peso’s exchange rate to 12.8 per U.S. dollar from 12.2.

The initiative also raises Mexico’s estimated oil production to 2.56 million barrels a day from a previous estimate of 2.55 million barrels a day.

The legislation postpones the cancellation of a federal tax on gasoline sales, a portion of which is channeled to state governments.

The changes approved by the lower house would give the government more than 80 billion pesos ($5.84 billion) of additional revenue next year, which would go toward education and farming programs, Sebastian Lerdo, a lawmaker from the Institutional Revolutionary Party, said yesterday in statements to reporters in Mexico City.

Calderon on Sept. 8 proposed total spending of 3.62 trillion pesos for next year, an increase of 2.5 percent in real terms from 2011.

The Senate must approve the income portion of the budget by Oct. 31 and the lower house must pass the spending portion by Nov. 15.

To contact the reporter on this story: Adriana Lopez Caraveo in Mexico City at adrianalopez@bloomberg.net

To contact the editor responsible for this story: Joshua Goodman at jgoodman19@bloomberg.net


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