The 10 points to know about the 2020 Economic Stimulus Package

The federal government's proposal for next year's Economic Stimulus Package, which includes the Federation Expenditure Budget Bill, the Federation Revenue Law initiative, and the General Economic Policy Criteria.

The 10 points to know about the 2020 Economic Stimulus Package
The 10 points to know about the 2020 Economic Stimulus Package

1. The federal government believes that the Mexican economy will grow between 1.5% and 2.5% by 2020, an average of 2% that almost doubles the forecast by private analysts, whose forecast is at 1.3% for the following year.

The official forecast also exceeds the forecast by the government itself in the Pre-Criteria 2020, whose range was from 1.4% to 2.4%, an average of 1.9%.

The SHCP also expects the wholesale dollar price to rise to 20 pesos by the end of next year, while analysts estimate it to trade at 20.31 units.

2. The Expenditure Budget of the Federation (PEF) contemplates spending almost 6.1 billion pesos the following year, against 5.8 billion pesos approved for 2019. This is the budget with the largest amount of money in history, which according to the federal government, prioritizes the use of public spending towards social programs that reduce economic, social and regional inequalities, but also consolidate republican austerity.

3. The government emphasized the need to boost Pemex, whose support will total 86 billion pesos, 46 billion through a capitalization in the PEF and 40 billion for lower-income that will receive the federation.

4. The agencies that the government plans to increase its budget the following year are the Secretariat of Energy, whose expenditure would rise from 27 billion pesos to 49 billion, followed by the Secretariat of Public Function and the Secretariat of Welfare.

5. On the other hand, the agencies that the government proposes to cut its budget more are the Ministry of the Interior, whose spending would plummet from 61 billion pesos to only 6 billion, continuing with the Ministry of Tourism and the Ministry of Agrarian, Territorial and Urban Development.

6. The government estimates that the Federation will receive revenues of 6.1 billion pesos during the following year, against 5.8 billion approved for 2019.

Six out of every 10 pesos that the Federation will receive in 2020 will be from the collection of taxes because they will leave the income of 3 trillion 499 billion pesos the following year, 188 billion more than in 2019.

7. The government proposes an update of the quota in worked tobaccos from 0.35 to 0.4980 pesos per cigar sold or imported.

8. The government proposes an update of the quota for soft drinks and other flavored beverages from 1.17 to 1.2705 pesos per liter.

9. Proposal to treat digital services, such as Netflix, Uber, Spotify, Rappi and Airbnb, so that they pay the corresponding VAT on a monthly basis.

10. The federal government plans to contract a debt for a maximum of $532 billion pesos in national currency in 2020, and that the public sector contracts an external debt for $5.3 billion dollars ($105 billion pesos).

By Agencies

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The losers of the 2020 Economic Stimulus Package

Within the Draft Budget of Expenditures of the Federation for Fiscal Year 2020 presented by the Secretariat of Finance to the Chamber of Deputies, which determines the items that will receive next year the various government agencies and other institutions, these are those that have foreseen a lower resource.

For the Ministry of the Interior, highlights the decrease in the budget that will receive for 2020 of 5,804 billion pesos, lower than 60,783 billion in 2019, a fall of 90.45 percent.

The above, since the funds were transferred to the Secretariat of Citizen Security, a federal government agency established on November 30 to which it was assigned functions of public safety, the professionalization of the police, among others.

Sectur

For the Secretariat of Tourism is expected to receive just over $5 billion pesos, less than the $8,765 billion pesos allocated in the 2019 budget. The agency is in charge of the Mayan Train, one of the main projects of the current administration which was allocated $2.5 billion pesos through the National Fund for Tourism Development (Fonatur).

Sedatu

The Secretariat of Agrarian, Territorial and Urban Development (Sedatu) will receive a budget of 10,939 billion pesos for 2020, a figure that contrasts with the 18,754 approved in 2019.

Sedatu has among its mission to contribute to national and sectoral development, through the design and development of public policies, as well as the generation of decent and decent housing, with a cross-cutting vision and articulated with the National Development Plan and sectoral, regional, institutional and special programs of its competence.

Office of the President

For the agency headed by Alfonso Romo were proposed 918,577 billion pesos for next year, a figure that contrasts with the item of 1,569 billion pesos that were awarded for the previous year, 41.48 percent less.

This agency aims to provide advice and technical support to the President, through information services, agency, coordination, monitoring, and administrative support, for the achievement of the goals and targets set out in the National Development Plan (2019-2024).

Ministry of Labor and Social Welfare

For the Secretariat of Labor and Social Welfare (STPS) were proposed 28,756 billion pesos, less than the 43,265 billion pesos budgeted for 2019 expenditure of the agency.

Among the main projects of the Secretariat and the federal government is Youth Building the Future, which seeks to incorporate young people between 18 and 29 years in conditions of educational, social and labor exclusion. The program offers on-the-job training opportunities for one year, with scholarships and medical insurance.

Source: Milenio