Nearshoring will have a positive effect in the medium term for the finances of states and municipalities, projected by Moody's Mexico in the 2023 projections report where the agency indicates that the states that make up the northern and Bajío regions will benefit more from the relocation of suppliers from Europe and Asia.

He added that there are different benefits that could occur, such as the increase in the collection of own income in a structural way due to the arrival of investments, the increase in the collection of taxes and the increase in federal contributions.

Consult here: How are the new constructions that are demanded in the industrial market of Monterrey?

It is probable that several states and municipalities decide to incur in greater capital spending or decide to grant tax subsidies or other benefits to investors so that they decide to settle in their territory”, stressed the rating agency.

“In 2023, given our stable outlook, we do not expect widespread improvements in limited liquidity. However, the states and municipalities that will have elections in 2024 must plan to contract short-term debt so that its payment is manageable, three months before the end of their administration,” the report reads.

By 2023, he adds, the federal government contemplates GDP growth of 3%, which could boost the growth of 19% federal tax revenue, a nominal increase of 14% in participations, and a nominal increase of 10% in contributions. .

However, Moody's pointed out that it projects an economic growth for the country of 2%, in addition to the fact that the participations are lower than projected and that the Fund for Stabilization of the Income of the Federative Entities must be used.

Of interest: Construction continues in El Bajío with the start of 30,000 square meters in January 2023

The agency explained that the main challenge for the states corresponds to high inflation and high interest rates, which will reach their maximum level this year. 

In 2021, inflation of 7.4% and the low growth of participations of only 1% put pressure on the operating balances of states and municipalities, although the increase in revenues will manage to absorb inflationary pressures, so there could be no deterioration for the local sector; added to the fact that at some point in 2023 inflation will have to slow down.

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Original note