Introduction to Claudia Sheinbaum and Her Role
Claudia Sheinbaum is the current Head of Government (equivalent to Mayor) of Mexico City, serving since 2018. As a prominent figure in Mexican politics and an experienced public servant, she has been instrumental in shaping the city’s policies and addressing its challenges. Her first governance report, focusing on fiscal austerity and the absence of new taxes, sheds light on her administration’s financial priorities.
Austerity Measures and Financial Health
In her first governance report, Sheinbaum emphasized the continuation of fiscal austerity measures initiated during the previous administration. These measures have reportedly resulted in savings of 6.5 million pesos, as stated in the document updated to June. Sheinbaum also highlighted that public finances remain healthy and sustainable.
Responsible Use of Public Resources
The report underscores the responsible, efficient, and transparent use of public resources under the principles of republican austerity. This approach, combined with prudent and balanced debt management, has helped maintain sustainable public finances.
Strengthened Public Income
Sheinbaum’s administration has focused on strengthening public income, primarily through customs and anti-corruption efforts. This strategy aims to ensure a more equitable, just, and solidarity-based tax collection by 2025 without increasing existing taxes or creating new fiscal burdens for citizens.
Debt Management
Regarding debt, the government has prioritized addressing funding requirements in the local market using fixed-rate, long-term schemes. This approach aims to reduce costs and risks while adhering to the authorized debt ceiling set by Congress. Additionally, the government has refinanced and improved the debt portfolio’s repayment profile.
Reduced Public Spending to Decrease Fiscal Deficit
Despite updated figures available up to July, the report uses data from the first half of the year, which shows reduced public spending, increased income, and a decreased fiscal deficit.
Austere Public Spending
Sheinbaum’s administration has managed public funds with austerity, honesty, and transparency, focusing on strategic areas that foster economic growth. The report highlights the prioritization of resources for social programs, crucial for improving citizens’ quality of life and reducing poverty.
- Programmable public spending (excluding FAES, financial cost, and participations) in the first half was 3.09 trillion pesos, marking a 7.9% annual decline.
- Cuts were observed in health, environmental protection, education, housing, and other essential areas, as well as physical investment. However, the government denied that these cuts affected the provision of support and other benefits for citizens.
Non-Programmable Spending and Debt Costs
Although not detailed in the governance report, non-programmable spending during the period amounted to 775.864 billion pesos, a 2.7% annual increase. The financial cost of debt totaled 700.474 billion pesos, a 10.8% annual increase.
Public Income and Financial Requirements
Public income during the period summed 4.1 trillion pesos, a 3.4% annual growth. This income successfully covers non-programmable expenses but falls short of covering non-programmed budget requirements.
The Requerimientos Financieros del Sector Público (RFSP) totaled 567.600 billion pesos during the period.
Key Questions and Answers
- What is Claudia Sheinbaum’s role? Claudia Sheinbaum is the Head of Government of Mexico City, responsible for overseeing the city’s administration and policy-making.
- What are the key points of Sheinbaum’s first governance report? The report emphasizes fiscal austerity, the absence of new taxes, and the maintenance of healthy public finances.
- How has public spending been managed? Public funds have been managed austerely, with a focus on strategic areas that promote economic growth and prioritization of social programs.
- What measures have been taken regarding public debt? The government has focused on responsible debt management, addressing funding requirements in the local market, and adhering to the authorized debt ceiling.
- How have public income and expenses been balanced? Public income has grown by 3.4% annually, while programmable spending has decreased by 7.9% annually. However, this growth hasn’t fully covered non-programmed budget requirements.
