At the end of the month, the Ministry of Finance and Public Credit (SHCP) will deliver to the Congress of the Union the General Precriteria of Economic Policy (PGPE) 2024 in a context where the Mexican economy started the year strong although the risks of a recession are present in the United States, with the effects that this implies for Mexico.
In the Economic Package approved by Congress last year, the SHCP expects the Mexican economy to grow 3.0% and with it, the main source of financing, tax revenue to represent 14.7% of the Gross Domestic Product (GDP).
James Salazar, deputy director of economic analysis at CI Banco, told El Economista that this estimate for 2023 is justified by the good expectations that are held in nearshoring, or company relocation, and with this there would be no robust adjustments in tax collection. .
For this year, the projection of the Treasury is a 10% increase in tax revenues (4.6 trillion pesos), but it could be 12%, “justified by the good start of the year,” Salazar said.
In addition, it was proposed that the collection of the Income Tax (ISR), which is a tribute paid for economic activity, adds up to 2.5 trillion pesos and therefore represents 54.3% of the total collection via taxes.
In January, ISR collection grew 9.8% annually, while in the first two months it grew 8.3%, according to official data. Given this, Salazar commented that the behavior is a consequence of the good data on economic activity and employment.
The SHCP also estimated last November that the collection of the Value Added Tax (VAT) would be 1.4 trillion pesos; and the Special Tax on Production and Services (IEPS) of 486,212 million pesos.
recession risk
Janneth Quiroz, deputy director of economic analysis at Monex, commented to this space that the collection goals would be reached as long as the GDP grows 3 percent.
However, the risks of a possible US recession are still present despite the fact that the world’s largest economy also had a good start to the year.
“If we think that going forward, possibly, there will be a slowdown. It could even turn into a recession. What we are forecasting at the moment is a shallow recession that would not last long,” the analyst explained.
The risk of recession is linked to the increase in interest rates from the Federal Reserve and this reduces the attractiveness of requesting credit to curb consumption, Quiroz said.
