IMF国际货币组织全球-Mexico_Selected-Issues_42页_1mb

Summary of the Document: Mexico - Selected Issues

Core Content

This document provides an analysis of two key issues in Mexico: road construction and firm productivity, and budgetary spending pressures. It is prepared by the International Monetary Fund (IMF) as part of a periodic consultation with the Mexican government, based on data up to October 17, 2019.

Road Construction and Firm Productivity

Main Findings

• Low productivity growth is a critical challenge for Mexico.
• Upgrading basic public infrastructure, particularly road infrastructure, significantly raises firm productivity, not only for large firms but also for small and micro firms.
• Empirical evidence shows that a 1% decrease in average travel time to the 20 largest metropolitan areas increases firm productivity by 1.3%.
• The effect is causal, as the identification strategy accounts for reverse causality and endogeneity by excluding firms located near newly built or improved roads.
• Productivity benefits are more pronounced for larger firms, but small and micro firms also see significant gains, with a 1% reduction in travel time increasing productivity by about 1.2%.

Empirical Approach

• A longitudinal dataset of firm-level productivity and characteristics is constructed using the Mexican Economic Census (1993–2013).
• A novel dataset on travel times is developed using geo-coding and road network data.
• The identification strategy eliminates firms located within a certain radius (3–30 km) of newly built or improved roads to address endogeneity concerns.
• The econometric model includes interaction terms between firm characteristics and travel time variables to assess heterogeneous effects on productivity.

Key Figures and Tables

• Figure 1: Illustrates the expressway network in Mexico.
• Figure 2: Demonstrates the identification strategy used in the analysis.
• Table 1: Shows baseline and identification results with coefficients for the travel time variable and other firm characteristics.

Budgetary Spending Pressures

Key Points

• Public spending in Mexico has declined since the global financial crisis (GFC), with the programmable spending envelope falling from 19.6% to 17.3% of GDP.
• The composition of spending has shifted away from capital spending and social spending (health, education, housing, and community services).
• The planned fiscal adjustment under the current government will further reduce programmable spending, raising concerns about the quality and sustainability of the fiscal adjustment.
• Efficiency improvements and reforms in social spending, especially in health and education, are highlighted as key to achieving durable expenditure savings.

Spending Trends

• Post-GFC period: Public debt increased significantly, but was arrested in 2016 due to non-oil revenue increases and spending cuts.
• Deficit reached an average of 4% of GDP in 2009–10, and budgetary spending rose from 20.1% to 24.5% of GDP.
• Decline in programmable spending (2.3 percentage points) is mainly due to reduced capital expenditure, lower wages and salaries, and declines in subsidies and transfers.
• Spending increases are observed in pensions and interest payments.
• Social protection is the only area where spending exceeds its historical average.

Tables

• Table 1: Compares average public spending (2008–2017) and 2018 figures under economic and functional classifications.
• Table 2: Provides cost estimates for health and education expenditure.

Conclusion

• Road infrastructure investment has a positive and significant impact on firm productivity across all firm sizes.
• Budgetary pressures are growing due to declining revenues and tight fiscal envelopes, necessitating efficiency improvements and reforms in public spending.
• The IMF recommends focusing on spending efficiency and targeted reforms to support sustainable fiscal adjustment and growth in Mexico.