Rogelio Ramírez de la O: Challenges and stability in the Ministry of Finance

The announcement that Rogelio Ramírez de la O will continue at the helm of the Ministry of Finance and Public Credit (SHCP) under the next administration of the virtual president-elect, Claudia Sheinbaum, has brought reassurance to investors and financial markets. His appointment is seen as a sign of stability in Mexican fiscal policy, something crucial to maintaining the confidence of economic agents at a pivotal moment for the country. As an economist graduated from Harvard, Ramírez de la O will face various challenges in his management, including the need to make public spending more efficient, cut costly expenses to reduce the budget deficit, generate more tax revenues without resorting to a tax reform, and find a sustainable way to support Pemex without compromising public finances. Continuity at the Ministry of Finance provides the opportunity to maintain a consistent fiscal policy, avoiding abrupt changes that could affect the country's economic stability. Stability is a key factor at a time when Mexico is seeking to recover from the impacts of the pandemic, inflation, and geopolitical uncertainty. One of the first challenges Ramírez de la O will face is presenting the 2025 economic package. In this context, it will be crucial to strike a balance between reducing the deficit, controlling public debt, increasing public revenues, and supporting Pemex without jeopardizing the State's finances. This will be a true test of the new Finance Minister's ability to handle the country's economic complexities. Regarding deficit reduction, there is a need to make public spending more efficient and cut non-priority items. This must be done strategically to avoid an economic recession or a downgrade in Mexico's credit rating by rating agencies. Another significant challenge will be generating more revenue without resorting to a tax reform. The use of technology to improve tax collection through the Tax Administration Service (SAT) will be a key strategy to increase revenues without affecting taxpayers' economy. Regarding Pemex, the state-owned company faces significant challenges that will require strategic decisions from the Ministry of Finance. It is essential to determine what kind of support will be provided to the oil company without compromising public finances and ensuring its long-term viability. Transparency and efficiency in managing resources allocated to Pemex will be crucial aspects to consider in the fiscal strategy. In summary, the path ahead for Rogelio Ramírez de la O at the Ministry of Finance will be filled with challenges that will require skill, strategy, and long-term vision. Economic stability, efficiency in public spending, revenue increase, and support for Pemex will be the pillars on which fiscal policy in the next six-year term will be built. The key will be to find the necessary balance to drive economic growth without jeopardizing the country's financial stability.