Mexico Budget Assumes Oil Output Growth Not Seen Since 1982

Mexico Budget Assumes Oil Output Growth Not Seen Since 1982
Mexico's conservative budget for next year depends in part on its oil company boosting production by about 17%, something that the country hasn't achieved in almost four decades.

“If Pemex missed the target, the government would have to adjust the fiscal plan for the year,” said Ociel Hernandez, an economist at BBVA. “Depending on the average oil price, Pemex revenues would fall, and thus risks of downgrades would persist.”

Oil production is not the only assumption in the budget that some observers see as too optimistic. It also forecast the economy to grow 1.5% to 2.5% next year. Analysts in a Bloomberg survey on average see an expansion of 1.5%, with none expecting growth to exceed 1.9%, which is also the International Monetary Fund’s forecast in July.

To contact the reporters on this story:
Amy Stillman in Mexico City at astillman7@bloomberg.net;
Nacha Cattan in Mexico City at ncattan@bloomberg.net;
Eric Martin in Mexico City at emartin21@bloomberg.net

To contact the editor responsible for this story:
Juan Pablo Spinetto at jspinetto@bloomberg.net


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