In light of the expected changes in the international scenario and the fiscal adjustments outlined above, the Mexican economy will moderate its rate of growth from a level of around 7 percent this year to 4.5 percent in 2001. Inflation As was mentioned above, the EPG for 2001 assume an inflation rate of 6.5 percent or less, which is consistent with Banco de Mexico's medium term program. However, it is important to underline that this deficit is consistent with the availability of long-term external savings. The economic program for 2001 includes a reduction in the public deficit to a level of 0.5 percent of GDP, which is consistent with a real GDP growth rate of 4.5 percent, an inflation rate no larger than 6.5 percent and a current account deficit to GDP ratio of 3.8 percent. The efforts carried out to strengthen the government's fiscal stance is especially important, given the dynamism that domestic demand has shown throughout this year and the less favorable external environment expected to prevail in 2001.
Mexican authorities intend to finance the entire public sector deficit in the domestic market.
Thus, for the first time since 1990, the government is asking Congress for a zero net external debt ceiling. A stronger fiscal stance in 2001 is the first step in converging towards a balanced budget, a central component of this Administration's medium term economic strategy. The implementation of sound and responsible economic policies in 2001 will play a fundamental role in creating an environment of stability and certainty, an environment geared towards achieving better living conditions for the Mexican population. 3.41 12.6 -4.2 Revenue sharing 176,831.7 192,490.8 3.22 3.14 13.2 1.9 Adefas and other 15,750.6 13,786.0 0.29 0.22 n.a. However, for the purpose of calculating some items of the budget, these were the references used.