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Mexican Lawmakers Approve Wider 2011 Budget Deficit Than Calderon Proposed
 Adriana Lopez Caraveo & Jens Erik Gould - Bloomberg
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October 20, 2010
Mexico’s lower house of congress approved the income portion of the 2011 budget, passing a wider deficit and higher oil price than President Felipe Calderon originally proposed.
Mexican lawmakers passed by a vote of 354 to 81 the 2011 income law with a deficit equal to 0.5 percent of gross domestic product and an estimated oil price of $65.40 per barrel. Calderon on Sept. 8 proposed a deficit of 0.3 percent and estimated oil would sell for $63 per barrel on average next year.
The house floor also raised taxes on tobacco by 7 pesos per pack of 20 cigarettes and set a 25 percent tax on energy drinks such as those sold by Red Bull GmbH.
The changes approved by the lower house would allow the government to spend an additional 61 billion pesos ($4.9 billion) next year, which would go toward security and social programs, Roberto Gil Zuarth, a member of the finance committee and member of Calderon’s National Action Party, said before the approval.
Calderon on Sept. 8 proposed total spending of 3.35 trillion pesos for next year, an increase of 2.3 percent in real terms from 2010 or 5.5 percent in nominal terms.
The budget plan approved by the lawmakers doesn’t include a reduction in the country’s value-added tax, which had been sought by the Institutional Revolutionary Party and opposed by Calderon.
The bill, which now moves to the upper house, must be approved by Oct. 30. The lower house must agree on the spending portion of the 2011 budget proposal by Nov. 15.
To contact the reporters on this story: Adriana Lopez Caraveo in Mexico City at adrianalopez(at)bloomberg.net; Jens Erik Gould in Mexico City at jgould9(at)bloomberg.net
To contact the editor responsible for this story: Joshua Goodman at jgoodman19(at)bloomberg.net
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