By Dave Graham and Diego OréMEXICO CITY (Reuters) - The Mexican government's plan to run up the biggest budget deficit in decades during the 2024 general election year could put pressure on public finances and eventually threaten its credit rating, analysts said on Monday.
Lopez Obrador last week backed former Mexico City Mayor Claudia Sheinbaum as his party's candidate to succeed him.
Historic data show the projected budget deficit for 2024 will be the highest since 1988 as a proportion of GDP.
The government's higher spending plans should bolster Latin America's second-biggest economy, which has outpaced forecasts this year, brightening the outlook for 2024.
He also noted that since Mexico's current account deficit is currently considerably lower than foreign direct investment, there was a pool of untapped demand in the economy that the government could temporarily offset via higher spending.
Persons:
Dave Graham, Diego, Andres Manuel Lopez Obrador, Lopez, Patricia Terrazas, Lopez Obrador, Mexico City Mayor Claudia Sheinbaum, Gabriela Siller, Alberto Ramos, Goldman Sachs, Ramos, Raul Feliz, Feliz, Diego Ore, Noe Torres, Jamie Freed
Organizations:
MEXICO CITY, Lopez Obrador's, Action Party, PAN, Mexico City Mayor, Banco Base, Bank of
Locations:
MEXICO, Mexico, Bank of Mexico, Mexico City