Pena Nieto Gets Boost From Mexico Central Bank After Budget Cuts

The Mexican government will receive 31.4 billion pesos ($2.1 billion) in special revenue from the central bank, allowing a spending boost as falling oil prices prompt budget cuts.

President Enrique Pena Nieto’s administration will propose channeling the funds to joint infrastructure investments with the private sector next year, the Finance Ministry said in a statement today.

The revenue comes from the central bank’s 2014 operational surplus. Mexico’s government, which gets a third of its revenue from oil, is cutting spending after a 46 percent decline in the price of crude since June.

After paring this year’s outlays by 124.3 billion pesos, or 0.7 percent of gross domestic product, Mexico will reduce spending by an additional 0.7 percent of GDP next year, the Finance Ministry said March 31.

The Banco de Mexico surplus was left over after it set aside capital reserves as required by law, the Finance Ministry said. The Mexican mix of oil closed at $55.10 per barrel yesterday, rebounding from an almost six-year low of $37.36 in January.

bloomberg.com