The directors of the Association of Banks of Mexico (ABM) they stated in the 87th Banking Convention that it is important that fiscal consolidation be achieved in 2025 to avoid the loss of investment grade.
They added that consolidation could have a spending cut component, with increased tax revenueso it is important that economic growth is maintained.
Daniel Becker, vice president of the AMB, expressed in an interview that “fiscal consolidation is necessary because if it is not achieved we will lose the investment grade.”
“It must be clarified that fiscal consolidation will not occur in 2025, we will not reach zero deficit, but it will converge as the deficit reaches 3 percent of GDP next year, 2 percent in 2026 and so on until reaching zero.” “, accurate.
“Clearly there must be a discipline and a vision that we must reach zero deficit and a primary surplus as we had before,” he added.
Alberto Gómez Alcalá, vice president of the ABM, stated that “the Ministry of Finance proposes fiscal consolidation in the 2025 Economic Policy Pre-Criteria and we all agree that it is important that it be done and that it is necessary after this extraordinary expense associated to federal government infrastructure projects.”
He expressed that perhaps the question is how much consolidation occurs, and that will depend on many other issues, not just the actions of the Government.
“But I see that there is a consensus that, first, this fiscal consolidation is needed, there may be some discussion about how much an agenda can contribute to strengthening public income, which is anticipating the response of the Ministry of Finance It is above all an effort to reduce spending and overall it will give us the final number,” he added.
How much will the Banxico rate close in 2024? This is the bankers’ forecast
Julio Carranza, president of the ABM, said that bankers anticipate that there will be more interest rate cuts and predict that the Banxico benchmark will close at 10 percent at the end of 2024.
Gómez Alcalá trusted that there will be a decrease in interest rates in the United States and Mexico, “The question is rather when”.
“Due to the resistance in productive activity in the United States, that has been postponed, but it will eventually arrive and that is what has injected a bit of volatility into the markets,” he added.
“In the case of Mexico, the famous soft landing is much more advanced. Here the deceleration is occurring in an orderly manner and inflation is subsiding and Banxico is anticipating it by lowering rates more frequently than the United States,” he stressed.
