Mexico's public debt could exceed 64 percent of Gross Domestic Product (GDP) by the end of this decade, according to estimates released Wednesday by the International Monetary Fund (IMF).
This projection once again places the decline of Mexican
public finances and the challenges the country will face in maintaining its
spending, investment, and debt repayment commitments in the coming years at the
center of the debate.
According to the IMF's measurement, gross debt comprises all
outstanding financial obligations incurred by the public sector, either
directly or through its financial agents, without deducting any assets it may
hold.
This indicator allows for an assessment of the volume of the
State's financial commitments in relation to the size of its economy. Added to
this are factors such as virtually nonexistent economic growth, the public
revenues the government is imposing on the struggling citizenry, the cost of
financing, and the government's ability to pay.
Should this trajectory materialize, Mexico would face the
challenge of managing its debt without compromising the stability of its public
finances or limiting the resources available to address the already diminished
needs of its population.
The behavior of the debt over the coming years will be a key
element in assessing the country's fiscal sustainability and the government's
room for maneuver to boost stagnant economic development and finance public
services.
The central question will be how to ensure the country's
financial obligations remain sustainable while social needs continue to be
unmet, and how to achieve the economic growth that has practically been lost.