The broadest measure of the public balance (PSBR) posted a 1,413 billion pesos deficit as of November, an unprecedented figure. On a 12-month rolling basis, the nominal fiscal deficit widened to 5.3% of GDP, close to the 2024 deficit projected by the MoF (-5.9%). The result was mainly explained by an increase in total expenditure, particularly the programmable component in government-controlled entities and financial cost consistent with high interest rates. In addition, we highlight lower than estimated oil income, due to weak oil production and below budgeted gas price, which more than offset VAT and import taxes income, which benefited by increased consumption and a modification of the tariff regime. Finally, net government debt stood at 47.7% of GDP on a 12-month rolling basis, lower than the 51.4% expected for 2024. December 2024 fiscal data will be published Jan 30th.
Our view: As of November, fiscal data point to an expansionary fiscal policy approach not seen in decades due to large infrastructure projects and social programs. We forecast a nominal fiscal deficit of 5.9% of GDP in 2024. For 2025, we anticipate a fiscal consolidation with a nominal deficit of 3.9%. We keep the view of a challenging fiscal consolidation for this year and 2026. There’s some room to increase revenues in 2025 by reducing tax evasion and elusion, but more measures would be needed in 2026.
