Can AMLO Afford to Pay for What He Promised Mexico?

While supporters of Andres Manuel Lopez Obrador celebrate their new president and his vow to boost social programs for Mexico’s poor, economists are trying to figure out whether he can pay for it all. Their conclusions could decide whether financial market turmoil that preceded his swearing in on Dec. 1 will continue. AMLO, as he’s known, has until mid-December to present his 2019 budget. His finance team insists it will be fiscally responsible. Some investors are skeptical.

Mexico’s first leftist president in decades wants to boost public investment in projects like oil refineries, increase pensions for the elderly and give grants for students, all without raising taxes or racking up debt. He’d help pay for it, he says, by slashing government officials’ salaries and rooting out corruption. He also promises to keep gasoline prices flat after inflation and offer minimum price guarantees for small farms as he seeks to bolster locally grown crops in favor of imports. He said Dec. 3rd the budget is almost ready.