Government of Yucatán to Consider Debt Only for Profitable Projects with Solid Financial Indicators
The government of Yucatán will only resort to borrowing if projects guarantee profitability, have strong financial indicators, and a robust backing through federal or private investment, according to Juan Sánchez Álvarez, the state’s Secretary of Administration and Finance. The government aims to maintain fiscal discipline and emphasize increased self-revenue collection.
HR Ratings Upgrades Yucatán’s Credit Rating
In March, HR Ratings raised Yucatán’s credit rating from HR AA to HR AA+ and changed the outlook from positive to stable. This upgrade was due to lower-than-estimated long-term financing disposition and the timely liquidation of short-term state debt, surpassing endemic projections.
Conditions for Maintaining Credit Rating
The calificadora highlighted that factors potentially lowering the credit rating include acquiring financing above estimates and increasing circulating debt. However, Governor Joaquín Díaz Mena’s firm stance ensures borrowing only if projects demonstrate profitability, solid financial indicators, and strong federal or private investment backing—possibly in a 3:1 or 4:1 ratio.
No Surprises in Spending
Sánchez Álvarez emphasized that the state government maintains fiscal discipline. The governor, known for his disciplined leadership, understands financial figures and works alongside the administration to execute responsible programs. He ensures no unexpected announcements that aren’t part of the plan, while also knowing when the Secretariat must fulfill its duties.
Improving Revenue Collection
Although the Yucatecan Congress authorized a budget exceeding last year’s by approximately 2,000 million pesos, the state administration aims to enhance its revenue collection mechanisms. Sánchez Álvarez explained that, despite a solid revenue structure, efforts focus on improving collection indices, reducing tax evasion, and targeting non-compliant taxpayers. Innovative measures like green taxes are being implemented, which help businesses reduce emissions and bolster state revenue.
State Income Composition
The state’s income comprises 86% from the federal government and 14% from self-revenue. Sánchez Álvarez stressed the need to keep improving self-revenue numbers, as this eventually enhances federally participable resources according to the Secretariat of Finance’s methodology.
Federal Support and Tren Maya Progress
Yucatán continues to receive strong federal support, with Sánchez Álvarez highlighting the start of the Tren de Carga (Freight Train) project connecting Mérida to Humán, leading to Puerto Progreso. This development is crucial for Yucatán’s economic logic, with an initial investment of around 35 billion pesos and the state working on right-of-way releases.
Tren Maya Maturity
The Tren Maya project has entered a mature phase, generating positive expectations for Yucatán’s and southeastern Mexico’s economic development.
Key Questions and Answers
- Q: What conditions must be met for Yucatán to consider borrowing? The government will only borrow if projects guarantee profitability, have strong financial indicators, and robust backing through federal or private investment.
- Q: How has Yucatán’s credit rating changed recently? HR Ratings upgraded Yucatán’s credit rating from HR AA to HR AA+ and changed the outlook from positive to stable.
- Q: What measures is the Yucatecan government taking to improve revenue collection? The administration aims to enhance collection indices, reduce tax evasion, and target non-compliant taxpayers through innovative measures like green taxes.
- Q: What is the composition of Yucatán’s state income? Approximately 86% comes from the federal government, while 14% is self-revenue.
- Q: What progress has been made on the Tren de Carga project? Construction has started with an initial investment of around 35 billion pesos, and Yucatán is working on right-of-way releases.
- Q: What are the expectations for the Tren Maya project? The mature phase of the Tren Maya project generates positive expectations for Yucatán’s and southeastern Mexico’s economic development.
