--No new taxes included in 2013 budget proposal
--Federal budget excluding Pemex to have zero deficit
--State oil company Pemex financed investment equivalent to 2% of GDP
By Anthony Harrup and Juan Montes
MEXICO CITY--Mexican President Enrique Pena Nieto submitted to Congress Friday his budget plan for 2013, which seeks to eliminate the government deficits of recent years while raising spending modestly from 2012.
Finance Minister Luis Videgaray handed in the proposal at the lower house, saying that the bill includes no new taxes for 2013, as the incoming government will sent a proposal for a broad overhaul of the tax system to Congress next year.
The government will run a balanced budget next year, compared with a deficit this year equivalent to 0.4% of gross domestic product, while financed investment at state oil monopoly Petroleos Mexicanos will remain at the equivalent of 2% of GDP.
"This will be a budget without a deficit. Debt won't be the driver of growth in 2013," Mr. Videgaray said.
Total spending excluding Pemex investment is expected to be 3.576 trillion pesos ($278 billion) next year, up 2.3% in real terms from 2012.
Mr. Videgaray stressed plans for spending on a number of social programs including life insurance for single mothers, a beefed up government pension program for people over 65, a crime-prevention program and an increase in spending on science and technology, all of which were unveiled by Mr. Pena Nieto in his inaugural speech last Saturday.
Because of the change of administration this year, the budget was submitted in December rather than September, and Congress has until the end of the month to debate, modify if needed, and pass the budget.
The proposal estimates that gross domestic product will grow 3.5% in 2013, a slowdown from this year's expected 3.9%. Mr. Videgaray attributed the lower growth largely to the slowdown expected in the U.S. economy. Inflation is expected to be 3% plus-or-minus one percentage point, which is the central bank's permanent target.
Pemex is expected to produce 2.55 million barrels a day of crude oil, of which it plans to export 1.184 million barrels a day. The oil price assumption used to calculate expected revenue is $84.90 a barrel. Mr. Videgaray said the government has taken out oil price hedges around that level, to protect the budget against lost revenue in the event of lower oil prices.
The peso's exchange rate for next year is estimated at MXN12.90 to the U.S. dollar.
The public-sector borrowing requirement, a broader measure of the fiscal deficit, is expected to be equivalent to 2.4% of GDP next year, compared with 2.8% in 2012, with total debt as a percentage of GDP falling to 37% by the end of 2013 from 37.5% at the end of this year.
Write to Anthony Harrup at anthony.harrup@dowjones.com and Juan Montes at juan.montes@dowjones.com
(END) Dow Jones Newswires
December 07, 2012 21:11 ET (02:11 GMT)
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