2011 Budget cuts deficit, boosts security spending

The Budget submitted on the 8th offered few surprises. The largest spending increases were for the security agencies, with the Army, Navy, Public Security, and Government ministries getting a combined 16.3% increase, while programmable spending as a whole goes up just 2.3%. (Part of the funding increase includes the unification of state level police forces, which has not yet been approved by Congress.) As previously announced by the Ministry of Finance, the budget includes no changes in taxes or rates, while promising to continue to raise gasoline prices in order to eliminate the implicit subsidy. The targeted public sector borrowing requirement is 2.7% of GDP, down from this year’s expected 3.2%. Sergio Sarmiento called the budget “in general, reasonable,” a view that appears shared by most observers. (Hacienda 9/8, Reforma 9/9)

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