Background on Claudia Sheinbaum and Her Administration
Claudia Sheinbaum is the current Head of Government of Mexico City, equivalent to a mayor in the United States. She took office on November 18, 2018, succeeding Marcelo Ebrard. As the first woman to hold this position, Sheinbaum has been instrumental in shaping Mexico City’s policies and addressing its challenges, including urban development, public transportation, and social programs. Her administration’s financial decisions significantly impact the city’s residents and set examples for other Mexican states.
Government’s Efforts to Control Fiscal Deficit
According to the Public Finances and Public Debt Report up to August, the Mexican government continued to exercise restraint on public spending, aiming to curb an elevated fiscal deficit. The Secretaría de Hacienda y Crédito Público (SHCP) reported that public spending fell by 3.6% in real terms compared to the previous year, totaling 5,961,107 million pesos. This decrease reflects the administration’s commitment to fiscal sustainability.
Public Spending Details
- Total public spending: 5,961,107 million pesos
- Decrease of 3.6% compared to the previous year
- Underspending by 321,973 million pesos compared to the approved budget
Rising Debt Financing Costs
Despite the controlled public spending, the cost of financing the debt increased by 9.3% in real terms during the same period. The government allocated 820,820 million pesos to debt servicing, which was 22,527 million pesos less than projected.
Impact on Population-Focused Spending
Programmable spending, which is allocated for public services to the population, decreased by 5.4% compared to the previous year. The actual spending was 299,445 million pesos less than planned, totaling 5,140,287 million pesos.
Decrease in Fiscal Deficit
Amidst the spending cuts, the fiscal deficit has been successfully reduced. The Requerimientos Financieros del Sector Público (RFSP) fell to 709,503 million pesos, a 37.6% decrease compared to January-August 2024. This improvement in fiscal balances reflects better-than-expected performance regarding the budgeted deficit and primary surplus.
Debt Levels Below 50% of GDP
The broadest measure of debt, the RFSP, remained below 50% of GDP despite a 4% increase compared to the same month last year. The debt stood at 17.8 trillion pesos, equivalent to 49.5% of GDP, lower than the 51.3% recorded at the end of 2024.
Key Questions and Answers
- Who is Claudia Sheinbaum? Claudia Sheinbaum is the Head of Government of Mexico City, equivalent to a mayor in the United States. She took office on November 18, 2018.
- What is the current state of public spending in Mexico City? Public spending has decreased by 3.6% in real terms compared to the previous year, totaling 5,961,107 million pesos. However, there has been underspending by 321,973 million pesos compared to the approved budget.
- How have debt financing costs changed? Despite controlled public spending, the cost of financing the debt increased by 9.3% in real terms. The government allocated 820,820 million pesos to debt servicing, which was 22,527 million pesos less than projected.
- What is the current fiscal deficit situation? The Requerimientos Financieros del Sector Público (RFSP) fell to 709,503 million pesos, a 37.6% decrease compared to January-August 2024. This improvement in fiscal balances reflects better-than-expected performance regarding the budgeted deficit and primary surplus.
- What are the current debt levels relative to GDP? The broadest measure of debt, the RFSP, remained below 50% of GDP despite a 4% increase compared to the same month last year. The debt stood at 17.8 trillion pesos, equivalent to 49.5% of GDP.
