Since the pandemic and its effects on public expenditure, Mexico’s federal government has returned to a previous trend of overspending its initially approved budget. Excluding 2019, the year in which the federal administration changed, and 2020, which included pandemic austerity measures, resulting in underspending, expenditure has been overspent by between 6 and 7 percent of the budget approved by the Lower House.
Between 2017 and 2022, a period which included the last two years of the previous administration and four of the current one, Mexico’s federal government overspent its budget by an average of 4 percent. Previous research by the International Budget Partnership and Fundar also found the approved total budget to have been overspent between 2014 and 2017, ranging from 3 percent in 2015 to 16 percent in 2016.
Deviations in the federal budget vary across sectors and ministries. For example, in the previous administration, the budget for social development was continuously underspent while that of the office of the presidency was highly overspent. In contrast, the current administration entered its term with a commitment to cut expenditure for a wide range of sectors but to protect and increase the budget for social protection.
The latter holds true. Under the mandate of “republican austerity,” the federal government has been cutting the budget for ministries, autonomous bodies, sectors, and public programs that are not considered to be priorities. One key example of the latter is the allocated budget for environmental protection, which is linked to three of the United Nations’ Sustainable Development Goals (SDGs): SDG 13, Climate Action; SDG 14, Life Below Water; and SDG 15, Life on Land.
Hence, this brief seeks to identify budget credibility challenges in Mexico’s environmental protection sector by examining budget deviation trends in the Ministry of the Environment for fiscal years 2017-2022. The analysis will examine the ministry’s resources by both economical and functional classification, as only looking at the aggregate budget masks allocations for other categories that are not linked to the achievement of the SDGs.
The study uses various sources, including federal budget databases, annual budget execution reports, and the latest Voluntary National Review presented in 2021 by Mexico.