Calderon Government

This effect domino observed in the economy of Mexico is causing great difficulties to the Calderon Government. The weakness of the Mexican economy is also reflected in the tax revenue. Main engines collection in Mexico, which are the tax the value added (VAT), tax on income (ISR) and oil revenues, deepened its decline in February, the lower dynamism of the economy. VAT registered in February a year on year fall of 29.5% (in January, its annual contraction was 17.2%), while the ISR (Impuesto sobre la Renta) recorded a negative rate of 10.2%, (in January had noted a decline of 3.3%). On the other hand, oil revenues in the quarter were 21.4% lower a the observed in the same two months in 2008 (both by the fall in the price of oil, production and exports). In this way, tax revenues are reduced in times where it is needed to increase public spending to stimulate the economy. Problems in the Mexican economy were also observed in the consumption of families, affected by the fall in activity and the increase in unemployment. The fears of the families before the economic situation are also observed in the banking sector where a sudden drop in the use of credit cards, combined with increases in interest rates (which is currently at 41,78%) was detected in that segment portfolio delinquencies.

The increase in interest rates in a context where the Banxico is relaxing its monetary policy is justified according to Professor of the Tecnologico de Monterrey, Luis Jose de la Cruz who considers: the component of risk is what you are doing that the interest rate not only not has fallen, but that it has even increased. The smaller companies are the worst hit by the crisis. In situations of crisis like the present, SMEs represent the segment of companies that suffer most from the consequences.

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