Mexican Gov't Plans to Cut Spending by 4.3 pct. in 2016

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The government plans additional spending cuts totaling 135 billion pesos ($8.84 billion), or 4.3 percent of the federal budget, in 2016, the Mexican Finance and Public Credit Secretariat said.

The proposed cuts are included in a preliminary budget report submitted to Congress by the secretariat that bases next year's revenues on an oil price of $55 per barrel, down $24 from the price used to set the 2015 federal budget.

The cuts will be "around half of what would have been necessary had spending not been reduced starting in early 2015," the secretariat said.

"It is also estimated that the adjustment will be lower by 360 billion pesos ($23.59 billion) than what would have been necessary if the 2013 finance reforms had not been approved," the secretariat said.

Officials began working in January to "re-engineer public spending from a zero-based budgeting perspective," the secretariat said.

The goal is to contain the spending growth that occurred in previous years, when oil prices were high, the secretariat said, adding that outlays rose at an average annual rate of 5.2 percent between 2000 and 2013, surging from 10.9 percent to 15.2 percent of the gross domestic product (GDP)

Mexico's economy grew by 2.1 percent in 2014, up from the 1.4 percent rate registered in the prior year but well below the official target of 3.9 percent