Politics: The 2025 budget reveals the 4T’s true political priorities, but simply doesn’t address the key problems with public finances
The overarching consideration underpinning the Sheinbaum administration’s 2025 budget proposal, which was released late Friday before last, is to ensure Morena's permanence in power through cash transfers delivered from multiple social programs. In the budget proposal, these will account for 9% of the total budget and 13% of programmable spending.
Only two ministries will enjoy significant increases. Considering that proposed non-programmable spending will grow 3.5% yoy and programmable spending (6.5 trillion pesos) will be reduced by 3.6%, the cuts in most of the public administration are considerable. However, this decrease in budgets is distributed inequitably, as some programmable spending items are growing (such as pensions and payroll), forcing reductions in other items, as in the cases of health, education and the environment, among others, and those that are to be applied to pet infrastructure projects.
The problem with this public spending model, which prioritizes social transfers over the rest of the state's functions and obligations, is its viability. AMLO made this possible throughout his administration, first by depleting existing reserve funds when he came to power and then by assuming more public debt, options not available to his successor .
In this week’s Outlook we analyze key aspects of the budget and the new public finance challenges they entail, from a political perspective.
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