Introduction
The Centro de Estudios Económicos del Sector Privado (CEESP) has highlighted the private sector’s growing importance in bolstering the economy amidst a decline in public sector contributions. The Consejo Coordinador Empresarial (CCE), a private sector organization, emphasizes the benefits of allowing private operations in a favorable business environment with clear rules and efficient security measures.
Public Sector’s Declining Contribution
CEESP’s analysis reveals a rapid reduction in the public sector’s economic participation, maintaining a downward trend. The most significant decline in value added by the public sector comes from state-owned enterprises, which have experienced a 6.2% decrease since the administration of Andrés Manuel López Obrador, primarily due to an 8.4% drop in directly controlled companies.
Additionally, the federal government’s operations have shown a negative evolution, with a 3% decrease in value added over the same period. In 2024, the public sector’s value added totaled 3.415 trillion pesos (2018 prices), marking a 0.2% increase from the previous year. However, this growth was insufficient to prevent an overall 2.3% decline during López Obrador’s six-year term.
The pandemic’s impact is a contributing factor, but the most substantial drop (3.4%) occurred in the first year of the previous administration, leading to a 0.4% economic contraction that year, according to private sector analysts.
Government Austerity and Its Consequences
In early 2019, the administration of Andrés Manuel López Obrador issued a Republican Austerity Memorandum, which included strict control of personal services and human resources. Despite these measures, the total public sector payroll increased more than in the preceding six-year term (219,000).
The private and social sectors offer alternatives to address the challenge of limited resources amidst growing expenditures, as stated by CEESP.
Private Sector’s Vital Role
CEESP underscores the private sector’s crucial role as the government’s best ally and the primary growth driver for the country. The sector’s production and employment levels validate this assertion.
Key Questions and Answers
- What is the main concern of CEESP? CEESP is worried about the rapid decline in public sector contributions to the economy.
- How has the private sector responded to this decline? CEESP believes that allowing private operations in a favorable business environment can bring significant benefits.
- What factors have contributed to the public sector’s decline? The pandemic and government austerity measures have played a role, with the latter leading to an increased public sector payroll despite intended cuts.
- Why is the private sector considered vital for economic growth? The private sector’s production and employment levels are essential drivers of the country’s economic growth, according to CEESP.
