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Mexico spending may burden future governments

Tuesday, December 20, 2022

Significance

The practice threatens to increase pressure on public finances.

Impacts

  • Weak congressional oversight, due to Morena’s majority, will allow opaque handling of budgets to continue.
  • Despite increasing spending pressures, the government will eschew revenue-boosting tax reform, to avoid alarming investors.
  • The Bank of Mexico’s tight monetary policy will dampen the inflationary impacts of public spending.

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