Mexico’s 2023 infra budget seen to benefit the private sector

Bnamericas Published: Monday, November 21, 2022
Mexico’s 2023 infra budget seen to benefit the private sector

Funds from Mexico’s approved 2023 infrastructure budget expected to go to priority projects like the Maya train, for which most contracts have already been awarded, will have a domino effect on the private sector. 

“This resource for basic infrastructure around public investment would, in turn, be causing a multiplier effect on private investment, particularly in gross fixed investment in the construction sector,” José Ignacio Martínez (pictured), head of Mexican think tank Lacen, told BNamericas.

“This could generate an immediate spillover of employment as the construction sector generates jobs immediately when the investment is made and this would be rebounding the construction industry,” he said.

In its 2023 spending budget, the government proposed allocating 766bn pesos (US$39.7bn) to investment programs and projects, a 23% bump from what was approved in 2022. 

Of this total, 143bn pesos are earmarked for the 200bn-peso Maya train, compared to 63bn pesos that were approved for this year after changes. And 43% of the approved amount for next year will go to stretches five, six and seven which are being built by defense ministry Sedena. 

The lower house approved the budget proposal on November 8.

The construction sector has still not recovered from the pandemic slump. In August, the sector registered production of almost 24bn pesos, an annual decline of 0.1%, according to statistics agency Inegi’s latest survey among construction companies.

But the new budget also hides an election strategy, Martínez said. Elections are slated for Mexico state and Coahuila next year and presidential elections will take place in 2024. 

“The budget granted to public investment represents 25% of what will be exercised in general in 2023. It will be invested in 79 new regional projects that will mainly benefit states [where the opposition is governing],” he said. 

“The government is trying to make huge investments in infrastructure, mainly in these states where [the opposition] governs,” Martínez said.

ALSO READ: Mexican construction prices up for 21 consecutive months

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