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News Article

Federal Government to Increase Spending in 2022

By Emilio Aristegui | Thu, 11/11/2021 - 09:04

The Mexican Government is keen to finalize its economic recovery strategy after the COVID-19 pandemic, increasing the budget of every state and municipality to kickstart the country’s economic reactivation.

Resources to Mexican states and municipalities will be 4.7 percent larger in 2022, representing an increase of about MX$100 billion (US$4.92 billion) according to a recent press release from the Ministry of Finance and Public Credit (SHCP). The funds have already been transferred to the corresponding entities, said Victoria Rodríguez Ceja, Deputy Minister of Expenditures, Ministry of Finance.

Budget increases for every region will be based on their population and Gross Domestic Product, added Rodríguez Ceja. The resources are to be distributed under strict adherence to the formulas and procedures of the Fiscal Coordination Law’s Branch 28, which covers federal participation, and Branch 33, which includes federal contributions.

Rodríguez Ceja indicated that, “There are 10 federal participation funds, whose resources are freely available to all entities and municipalities, which, this way, have full legal certainty of their transfer. The amounts distributed are public and the Ministry of Finance prepares a monthly and annual report to the Congress of the Union.” The process begins with the Federal Government’s transfer of funds to the states, those which then redistribute them under required regulations to municipalities. The funds represent 90 percent of what the Federal Government sends to all states and municipalities, making this process the most important in a national scale when it comes to reception of government funds.

For 2022, Chiapas, Veracruz, Guerrero and Oaxaca will receive the most funds for infrastructure as the Government seeks to amplify investment to help states that are lagging on infrastructure development. These states are set to increase their investments on works for drinking water, sewage, drainage, electrification, education, health, housing and urbanization as reported by MBN.

The data used in this article was sourced from:  
SHCP, MB
Emilio Aristegui Emilio Aristegui Junior Journalist and Industry Analyst