Climate is integrated into budget considerations in Mexico via a qualitative analysis of how climate-related issues can affect inflation and interest rates.
This analysis features in two reports submitted to Congress by the MoF each year. Going forward, more quantitative analysis is called for.
Key Messages
- Qualitative analysis of the potential impacts of climate-related issues, especially those relating to agricultural production, on macroeconomic variables (inflation, interest rates) is brought to bear on the budget via the pre-economic guidelines and the economic guidelines submitted to Congress by the MoF in April and September, respectively.
- As a next step, quantitative analysis of how adverse scenarios impact public finances (i.e., income, expenditure, and debt) is needed.
- Quantitative analysis provides clearer insights into the fiscal risks associated with climate change, which can strengthen discussions with policymakers and enable more informed decision-making.
Keywords
budgetary processesfiscal impactsphysical riskqualitative analysis