Public debt will increase more with AMLO than with Peña Nieto. – IMF forecasts

It is estimated that public debt will represent 16 trillion pesos the size of the Mexican economy, the highest level in the last 30 years.

MEXICO (Agencies) – The International Monetary Fund (IMF) predicts that the public debt during the government of Andrés Manuel López Obrador will increase in greater magnitude compared to the six-year term of Enrique Peña Nieto, despite the fact that the president has ruled out taking the country into debt to face the Covid-19 pandemic.

Gross public debt will represent 65.9% of the size of the Mexican economy, equivalent to about $16 billion pesos, considering that the value of Gross Domestic Product (GDP) was $24.3 billion pesos in the first quarter of this year.

This means the highest level of debt in the last 30 years, and an increase of 12.2 percentage points or $3.1 trillion pesos compared to 2019, when commitments were equivalent to 53.7% of the value of the economy ($12.9 million pesos), according to the recent report World Economic Outlook (WEO) of the IMF.

If the IMF forecast is confirmed, the debt will grow in just one year in great magnitude than during the entire past administration, when liabilities rose from 42.7% of GDP in 2012 to 53.6% in 2018, an increase of almost 11 points in six years.

From the perspective of the fund, the debt will increase before the collapse of 10.5% that will represent the Mexican economy this year after the effects of the macroeconomic framework that caused the closure of multiple businesses due to confinement.

The IMF said that Mexico has been one of the countries that gave less fiscal support to counteract the impact of the coronavirus, since the government has only allowed the extension of tax payments and launched loan programs for businesses in favorable conditions of rate and term.