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The recovery of the economy, the stabilization of the peso against the dollar, as well as the refinancing operations carried out by the government to take advantage of the low interest rates of the central banks, helped both the debt and its financial cost to present decreases in its annual comparison in 2021.

According to data from the Ministry of Finance and Public Credit (SHCP), the Historical Balance of the Financial Requirements of the Public Sector (SHRFSP) -debt in its broadest measure- stood at the end of the year at 50.1% of the Product Gross Domestic (GDP), after having closed 2020 at 51.7 percent. In this way, the debt in its broadest measure was 13.1 billion pesos.

“Debt, as a percentage of GDP, decreased from 51.7% in 2020 to 50.1% at the end of 2021. This figure is 3.6 percentage points of GDP lower than programmed, and was achieved thanks to the active strategy of the Government of Mexico to refinance their liabilities both in international and local markets”, indicated the unit in charge of Rogelio Ramírez de la O.

In this sense, James Salazar, deputy director of Economic Analysis at CIBanco, explained that the decrease is due to the economic recovery that the country registered last year. He recalled that, in 2020, the SHRFSP reached maximum levels.

According to the 2022 Annual Financing Plan, the SHCP anticipates that the debt will continue to decrease. At the end of 2022, the agency estimates a level of 47.1% and that it will continue to drop until it reaches 44.9% in 2024.

In this way, the López Obrador administration would close its six-year term with a debt at the same level that Enrique Peña Nieto left it in 2018.

More resources to maintain debt

In the case of the resources that the government allocated to the financial cost of the debt, these totaled 687,001 million pesos last year, which meant a reduction of 5.3% compared to what was spent in 2020.

Of this expense, 675.755 million pesos were used to pay the interest, commissions and expenses of the debt of the federal government and the parastatal sector. The remaining 11,245 million pesos were allocated to the support of savers and debtors.

“What the Ministry of Finance has done to restructure debt has helped, through swaps, because at least internationally, interest rates remain low and the exchange rate maintains some stability,” he commented.

However, this will change this year. According to the estimates contained in the 2022 Economic Package, the Ministry of Finance and Public Credit (SHCP) expects the government to allocate 791,463 million pesos to the financial cost of the debt, this is 5.4% more than in 2021.

Last year, the low interest rates determined by various central banks, including the Bank of Mexico (Banxico), were taken advantage of by the SHCP through the implementation of an active refinancing strategy; however, by 2022, this will change, analysts explained.

“Both the Treasury and Banxico were already clear that this was going to happen because it is a process that we have already been mapping for months, and that is why they began to reconfigure and restructure liabilities,” Pablo López Sarabia recently told El Economista. , professor at the Tec de Monterrey.

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