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

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.

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 every month.

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).