Pena Nieto Gets Big Boost from Mexico Central Bank Brendan Case - Bloomberg
go to original April 30, 2015

The Mexican government will receive 31.4 billion pesos ($2.1 billion) in special revenue from the central bank, allowing a spending boost as falling oil prices prompt budget cuts.

President Enrique Pena Nieto’s administration will propose channeling the funds to joint infrastructure investments with the private sector next year, the Finance Ministry said in a statement. The revenue comes from the central bank’s 2014 operational surplus.

Mexico’s government, which gets a third of its revenue from oil, is cutting spending after a 46 percent decline in the price of crude since June. After paring this year’s outlays by 124.3 billion pesos, or 0.7 percent of gross domestic product, Mexico will reduce spending by an additional 0.7 percent of GDP next year, the Finance Ministry said March 31.

The infusion from the central bank “is a favorable surprise for public finances,” Luis Madrazo, the Finance Ministry’s chief economist, said by telephone. “Since it’s non-recurrent, what we need to do is invest it in productive infrastructure that has an impact on the rest of the economy.”

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