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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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Executive Summary and Recommendations

Over the past decade, Mexico has undergone significant economic and political reform. This period has witnessed important improvements in the health of public finances. The government’s narrow measure of the budget deficit has been below 1% of GDP for the past five years (2003-08). Furthermore, the public sector borrowing requirement – the broader definition of budget deficit1 – has been below 3% of GDP for the same period. Although these improved fiscal balances have been aided by higher revenues as a result of significant increases in oil prices, Mexico’s recent public finances have clearly reflected an era of fiscal responsibility. This improved fiscal situation should place Mexico in a better position to withstand the current global economic crisis.

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