Economics: Lower House Passes Revenue Bill
The Chamber of Deputies last week passed the government’s proposed Federal Revenue Law for 2016 and in the process made a few changes. One of the most significant alterations involved the expected average foreign exchange rate. It was raised to 16.40 pesos to the dollar from the 15.90 level the original bill laid out. That adjustment had the effect of raising projected revenues to 4.76 trillion pesos, almost 17 billion pesos more than the administration of President Enrique Peña Nieto had proposed.
Federal government revenues that are to be raised from taxes, contribuciones de mejoras (the amount of public funds spent to improve public infrastructure that are expected to be recovered through a variety of mechanisms and procedures, fees, products); aprovechamientos (revenues from fees charged for the use of natural and other resources that belong to Mexico and for public services the government provides); participaciones (the distribution or sharing of revenues collected by the federal government and returned to local authorities); aportaciones (conditional transfers that are now distributed under rules stipulated in the Ramo 33 part of budget law); transfers; asignaciones (revenues to be collected from the allocation of an entitlement); subsidies and other forms of support, are projected to total 3.10 trillion pesos, 9.32 billion pesos more than the original version of the bill had anticipated. Revenues from public bodies and enterprises are set to reach 1.52 trillion pesos, 7.64 billion pesos more than had been proposed originally.
The Senate is expected to pass the bill by the end of October after introducing some lesser changes.
In other economic news, the rate of unemployment slipped to 4.50% of the Economically Active Population (EAP) in September 2015. This result is the lowest jobless rate seen since August 2008, when it stood at 4.14%.
Despite the encouraging figure for September, underemployment (which records the percentage of workers who say they need and are available to work more hours) came in at 8.86%, which is higher than the jobless levels recorded for the same month of 2014 (8.35%) and 2013 (8.31%). The largest segment of those laboring in conditions of underemployment was comprised of people engaged in the commercial sector.
Commercial establishment revenues from the retail sale of goods and services were up 6.4% during August, led higher by real term increases of 10.0% in the segment of food, beverages and tobacco and 6.1% in sales at supermarkets and department stores. Sales of cars and light trucks increased 14.4% compared to a year earlier.
The continuing strength of retail sales reflects, in part, the positive effect of historically low inflation experienced on some products so far in 2015.
Mexico’s Consumer Price Index (CPI) recorded a 12-month rate of inflation of 2.47% as of mid October, the lowest reading at the end of any two-week period since the authorities began publishing such data in January 1989.
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