Photo: Enrique Peña Nieto
Amid a recent economic slowdown, “we’re faced with the need to accelerate public spending,” he said in an event at the Los Pinos presidential palace.
The head of state said in remarks to Mexico’s 31 state governors that the additional $2 billion would be invested in three programs designed to have a “very positive impact” on economic performance.
One of the programs will allocate $994 million to bolster regional growth through public works programs such as road-paving and infrastructure investments.
An equal amount will go toward reactivating the housing sector through loan support, while an additional $76 million will be used to boost lending to businesses via development banks.
The goal is to leverage the strength of Mexico’s public finances to “provide a decisive and forceful push to grow the economy,” Finance Secretary Luis Videgaray said during the event.
Mexico’s current level of public indebtedness - with total debt equivalent to 35.5 percent of GDP - gives us “the space to apply immediate reactive measures involving a moderate, manageable and, above all, temporary budget deficit,” Peña Nieto said.
After Mexico’s economy expanded by just 1 percent in the first half of 2013, the government last month lowered its 2013 growth forecast to 1.8 percent, or half of its original estimate.