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Mexico’s next federal government will inherit a debt of 9.9 trillion pesos (around USD$503 billion ), equivalent to 42.4% of the Gross Domestic Product (GDP) and the highest to be received by an incoming administration in the country’s history.
On a per capita basis, the commitments of the public sector amount to 79,597 pesos .
Analysts consulted by EL UNIVERSAL commented that, during the present six-year administration, the national debt nearly doubled while investment levels in Mexico were seriously jeopardized, arousing warning calls from the International Monetary Fund and other institutions that urged the country to take action and reduce liabilities.
The level of debt will leave the following administration led by Andrés Manuel López Obrador with little scope to maneuver, though the President-elect has promised to reduce Mexico’s financial commitments to the extent possible.
The subject of the national debt became a trending topic a few days ago, after the government issued a statement about its status before the Securities and Exchange Commission (SEC) of the United States to assess Mexico’s capacity to issue UMS bonds , which was widely interpreted as a placement of new public debt.
In view of the confusion, the Ministry of Finance decided to categorically deny rumors spread by a foreign agency.
At the end of Mexico’s former president Ernesto Zedillo Ponce de León ’s administration, liabilities of the public sector rose to over 2 trillion pesos , which represented a 30.6% of the GDP .
Afterward, Vicente Fox Quesada left liabilities for 3.1 trillion pesos , which was higher than before, but reduced to 29.5% in proportion to the GDP.
With former president Felipe Calderón Hinojosa , liabilities rose to 5.9 trillion pesos , reaching a 37.2% with regard to the GDP . During President Enrique Peña Nieto ’s administration, public debt was considerably increased by government expenses, development banking, trust funds, and debts from IPAD as well as public companies and institutions , among other things, adding another 4 trillion to the amount left by Calderón, making a total of 9.9 trillion pesos .
Independent economist Jonathan Heath
stated that Peña Nieto could go down in history as the most expensive president, increasing public debt by several percentage points. “He will deliver the national debt in a copper platter, at best,” he stated, after recalling that former president Vicente Fox had handed an all-time low national debt “on a silver platter,” when Francisco Gil Díaz worked at the Ministry of Finance , consolidating efforts of the Zedillo administration.
Heath stressed that the inherited debt burden isn’t necessarily a tragedy since it’s still far from the 1980s crisis . It took two decades of sacrifice for the Mexican government to fix a problem that began in the 1970s.
Internet users may consult Mexico’ national debt in real time through National Debt Clocks .
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