Fitch Publishes 'Impact of Federal Spending for Subnationals in Mexico'
Fitch believes that the project of federal spending is in line with historical records and consistent with the Federal Government tightening policy.
Even though the budgetary net effect of the federal spending proposed in the PPEF2016 is positive, Fitch sees a potential effect on the public finances of the states and municipalities of Mexico that traditionally receive federal funds from wages and economic provisions (Ramo 23) and decentralization and reallocation agreements, which are the components that presented the highest reduction.
Fitch does not discount a further adjustment after budget discussions in the congress, particularly in the Ramo 23. The main purpose of the ramo's funds is regional and municipal growth through infrastructure programs.
The agency will provide follow-up to the federal spending to be approved by congress no later than Nov. 15.
The special report 'Federal Spending for Mexican Subnationals In the 2016 Expenditure Budget' is available at www.fitchratings.com and www.fitchratings.mx.