Economics: Social spending for 2023 to have scant effect on narrowing the social gaps

MEXICO - Report 27 Sep 2022 by Mauricio González and Francisco González

The López Obrador government’s spending bill proposal for 2023 is consistent with those of his first three years in that it proposes major increases in the current administration’s priority programs, programs that have revealed zero targeted impact on reducing social gaps. Likewise, significant funding is assigned for construction on the Maya Train rail network and the Dos Bocas refinery, and we can expect next year to be the subject of the same sorts of massive budget overruns we have witnessed to date, most clearly in 2021 and 2022. For 2023, when the economy is expected to weaken, we have not the slightest hope that this accelerated spending might exert some countercyclical effect given the deficiencies we have consistently observed in the programs and projects into which the funds are to be channeled.

In other economic news , inflation continued its climb through the first half of September, aggregate supply and demand accelerated growth during the second quarter, and retail sales widened a much better than expected 5.9% above levels of a year earlier in July. The monthly index of economic activity (IGAE) also increased in July, by 2.2% YoY.

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