(Bloomberg) -- Mexico will continue investing in state oil giant Pemex in 2023, likely ending the year with a small primary deficit, according to lower house Budget Committee Chair Erasmo Gonzalez.
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Overall, the 2023 budget will stick to President Andres Manuel Lopez Obrador’s track record of tight finances and conservative spending with continued support for social programs, Gonzalez said on Monday. He has discussed the plan with Finance Secretary Rogelio Ramirez de la O but hasn’t seen the final document.
“The economic variables will be very reasonable,” he said in a phone interview. “We have seen the Finance Ministry manage the public finances and economic policy with great responsibility and soundness.”
The government is unlikely to achieve a 2023 primary surplus, which excludes interest payments, of 0.4% of gross domestic product as projected in April’s preliminary budget, Gonzalez said. He assured, however, that there will be no “drastic change” in spending and any primary deficit will be small and stable. Mexico posted a deficit of 0.3% of GDP last year and, as of June, is expected to end 2022 with a balanced primary budget.
The Finance Ministry is set to present the budget to Gonzalez’s committee on Wednesday or Thursday.
The government will likely budget for a higher oil price than the $61.1 per barrel it projected in April, Gonzalez said.
Petroleos Mexicanos, the world’s most indebted oil major, has received billions of dollars in help from the government under Lopez Obrador. The budget “will include projects that will propel more investment” for Pemex, Gonzalez said. “It’s important to continue bringing solidity to our oil company.”
Read More: Mexico’s Money Man Feels Budget Crunch as Mega Projects Come Due
Ramirez de la O told Bloomberg News last month he expects the government’s debt to climb to 50% or 51% of GDP from the current level of 48.9% due to inflation and the spiraling costs of major public works projects.
Ramirez de la O didn’t give Gonzalez a growth projection but said that the country is being affected by international volatility, according to the lawmaker. The central bank last week cut its 2023 growth forecast to 1.6% from 2.4%.
Read More: Banxico Trims Mexico 2023 Growth Forecast on US Slowdown
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