The mandatory expenses of the public sector for 2023, such as transfers to the states for participations and contributions, the financial cost of the debt, in addition to pensions and retirement, will take 6.6 billion pesos (bp), of a total projected expenditure of 8.3 billion, of according to the Federal Expenditure Budget Project (PPEF), presented on Thursday afternoon by the Ministry of Finance and Public Credit (SHCP) to Congress for discussion and approval before November 15.
In other words, 80.6% of the total public spending planned for 2023 is already committed.
In addition to the payment of participations, public debt, pensions and retirement, other mandatory expenses are those corresponding to personal services, which include the payment of payroll to public servants, contributions to the states, and multi-year contractual obligations.
The PPEF details that the cost for life pensions and retirements will be 1.7 billion pesos; For the payment of the public debt and the debts of the previous fiscal year, 882,976 million are foreseen.
As for participations for the states, 1.2 billion pesos are projected, and for contributions to the states, 924,331 million are proposed.
Only the cost for debt, states (participations and contributions), pensions and retirements will take 51.8% of public spending for the following year.
When comparing the obligatory expenses against the total net expense, including pensions, the Treasury would have a margin of 1.7 billion pesos, equivalent to 19% of the total net expense.
Think tanks in Mexico such as the Center for Economic and Budgetary Research (CIEP) and Mexico Evalúa warn of the need for a reform, especially to pensions to free up space in public finances and increase the arrival of tax revenue, beyond auditing acts and greater control of taxpayers.
