Videgaray Says Mexico 2013 Public Investment Spending Sped UpNacha Cattan
Mexico’s Finance Minister Luis Videgaray said public investment spending grew 14.2 percent in 2013, a sign that the government is correcting expenditure delays that hurt the economy, according to Citigroup Inc.
Videgaray told reporters in Merida today that Mexico spent its full 2013 budget and increased investment spending in real terms, even as the nation’s budget gap was 0.3 percent of gross domestic product, which Credit Suisse Group AG says is the lowest since 2009. The official budget report for the fourth quarter will be released by the Finance Ministry later today.
Latin America’s second-biggest economy last year expanded at its slowest pace since the 2009 recession, in part because delayed government spending hurt growth, according to Rafael Camarena, an economist at Grupo Financiero Santander Mexico SAB. Growth in 2014 will speed up to 3.4 percent, according to economists’ estimates in a Bloomberg survey, as a budget deficit of 1.5 percent of gross domestic product, the largest gap since 2010, allows the government to boost outlays.
The investment growth figure is “a bit more than three times faster than the annual average,” Sergio Luna, chief Mexico economist at Citigroup Inc.’s Banamex unit, said in an e-mailed response to questions. “This indicates there was undoubtedly an acceleration” in spending.
Total government spending had fallen 9.7 percent in real terms from a year earlier in November after rising 10.9 percent in October. Congress approved changes to the balanced budget last year to allow for a deficit of 0.4 percent to help jump-start the economy. The government only posted a 0.3 percent deficit, Videgaray said today.
As of November, the government had yet to demonstrate that it will quickly increase spending on investment this year, Camarena had said in a Jan. 21 telephone interview.