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March 7, 2019
Effective from January 1, 2018, President Trump's fiscal reform enforced, among other aspects, a reduction of the federal corporate income tax rate from 35% to 20%. As soon as discussions on the reform began, concerns started to arise in Mexico regarding its possible impact on investment in our country.
March 6, 2019
Effective from January 1, 2018, President Trumps fiscal reform enforced, among other aspects, a reduction of the federal corporate income tax rate from 35% to 20%. As soon as discussions on the reform began, concerns started to arise in Mexico regarding its possible impact on investment in our country.
December 18, 2017
The net effect of the proposed tax changes on house prices will be limited. Doubling the standard deduction will increase the incentives to rent. The lower cap on mortgage interest deduction can lower prices of homes in higher price ranges over time. Other tax proposals will tighten housing market conditions and generate upward pressures on home prices.
November 10, 2017
In the United States a reduction is envisaged in the federal tax rate on companies from 35 to 20%. In Mexico there are voices saying this would be more serious for the country’s economy than the breakdown of the North American Free Trade Agreement (NAFTA). This is nonsense.
July 19, 2017
We revised down our GDP forecasts to 0.6% in 2017 and 1.5% in 2018, largely due to the upsurge of political tensions. Nevertheless, the economy will likely continue to recover, leaving behind the recession. Among other factors, the recovery will be driven by monetary policy, whose expansive tone will contrast with fiscal policy’s restrictive tone.
August 13, 2014
We estimate Tax Reform will have a total impact on inflation at around 0.9 pp to 2016. However, we expect that market has already internalized much of the impact on asset prices from April, at the beggining of discussion in Congress. All in all, we revised our inflation forecast to 2014 from 3.6% to 3,7% YoY and mantained our estimation for 2015 at 2,3% YoY.
July 15, 2014
La actualización de las proyecciones fiscales para el año 2014 reveló que este año el déficit fiscal efectivo subirá desde 0,9% del PIB estimado en el Presupuesto a un rango entre 1,7% y 2% del PIB dependiendo de si se aprueba o no la reforma tributaria. Esta estimación considera la reforma inicial, antes del protocolo, porque aún no sabemos cuánto se va a recaudar exactamente después de este acuerdo.
July 15, 2014
Chilean government expenditures should help to support aggregate activity figures in 2H14. Meanwhile the credit conditions survey revealed more restrictive conditions in both consumer loans and mortgages. In Colombia, President Santos confirmed Cárdenas as the Minister of Finance, a sign of continuity of economic policies that will likely drive a tax reform and allow the ambitious 4G infrastructure plan to continue.
July 14, 2014
The Budget Office updated its macroeconomic estimates for 2014, as a prelude to next year’s budget discussion in coming months. In this opportunity, GDP growth expectation was corrected downwards to 3.2% in 2014 (BBVAe: 3.1%) with an expected detrimental to fiscal revenues of USD2.0bn in relation to the current budget figures. In terms of expenditures, government revised them upwards in USD1.1bn, with an expected real increase of 6.6% in 2014. If we consider the accumulated 5.8% YoY increase in real expenditures as of May 2014, public expenditures should rise 7.1% YoY in the rest of 2014, supporting aggregate activity figures during 2H14. All in all, fiscal deficit for 2014 was corrected upwards from 0.9% to 2.0% of GDP, without considering additional revenues from the tax reform. In this regard, the Budget Office disclaimed that fiscal deficit could reach only 1.7% of GDP this year considering the additional revenues estimated to collect from the tax reform.
June 23, 2014
In this Economic Watch, we answer a list of fiscal policy questions that we consider to be essential for an investor who is following the Chilean economy. For example, we estimate the impact on the fiscal revenues that will have the new macro scenario recently published by the Central Bank; we analyze potential sources of funding for these lower revenues and the effect on market variables that could generate the decision chosen by the authority. In addition, we evaluate scenarios for long-term variables that soon will be provided by experts (potential GDP and copper price) and we quantified its impact on fiscal revenues next year, when will counteract higher revenues to be obtained from the tax reform.
