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9 OECD Journal on Budgeting, Volume 2009 Supplement 1

OECD Review of Budgeting in Mexico

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Over the past decade, Mexico has undergone significant economic and political reform. This period has witnessed important improvements in the health of public finances which should place Mexico in a better position to withstand the current global economic crisis.

 

Since 2006, the Mexican government has introduced a number of laws and reforms that aim to address structural challenges, improve fiscal responsibility and transparency, and create a budget process and fiscal framework that are more efficient and transparent and more in line with international practices.

This review discusses the recent reforms in Mexico and the current systems for budget formulation, the role of Congress, budget execution and financial management, and accountability for results (performance budgeting), and makes recommendations for further action.

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Annex B

Oil Revenue Management

Oil prices have been rising significantly since 2002, reaching a high of USD 145 per barrel in July 2008.1 The huge flows of revenues present an excellent opportunity for large oil exporters, providing access to fresh capital inflows that could be allocated to savings, investment, or external debt cancellation. However, oil price volatility and inefficient management of oil revenues can also generate non-desired effects. Some of the symptoms of the so-called “Dutch disease” include overheating the economy, reducing incentives to improve the tax system, and increasing pressure for exchange rate appreciation or exchange rate volatility.

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