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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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Fiscal Performance and Challenges

Over the past decade, Mexico has made significant improvements in its fiscal performance by implementing important reforms to establish macroeconomic and financial stability, to open the economy to trade and investment, and to change the political environment. The prudent fiscal policies pursued by the Mexican government have resulted in strong fiscal performance. Albeit aided by higher oil prices, these policies have successfully lowered public sector debt and reduced the budget deficit to 3% of GDP or below for the past five years (2003-08).1 Economic growth has improved over the past decade, although the economy is not expanding rapidly enough to make living standards equivalent to richer OECD countries.

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