Cut in Public Spending: Time to buckle down

Cut in Public Spending: Time to buckle down

Gerardo Flores – April 27, 2015

The drop in oil prices has affected public finances and the outlook seems without change in the short term. Therefore, a preventive measure has been to cut public spending 124 MMDP, and since there is no expected increase in taxes, our government is left with no choice but to recognize is time to buckle down, as the Secretary of Treasure stated on Tuesday April 21.


Sounds easy, but to coordinate the various public entities of the Public Federal Administration (PFA) to reduce spending without limiting their functions and without impact on the economy is a bit more complex than it seems.

From our perspective, a typical response might be, “It depends”. However, we prefer to refocus this word considering that public authorities must tighten their belts:

Diminish costs to the extent possible, for which they must assess whether budget planning is really oriented to both, operating expenses and implementation of programs.

Exert more efficiently the budget and achieve their goals despite the reduction in resources, in order to not affect the citizens.

Plan better their activities and the impact of these on public spending.

Estimate more accurately the frequency and how the budget is exercised. It will be essential to avoid over exercise thereof.

Negotiate better purchasing conditions through effective and efficient procurement processes, for which the precision in planning is important.

Develop higher productivity, for which, improving processes will be a key task in order to achieve greater fluency in the processes and increase the efficiency of the public body.

Supply reports with indicators that really work to improve agency performance and align staff to achieve their objectives.

We know it is not easy, but we believe that this “DEPENDS” view will help the public authorities achieve their goals despite budget cuts. Since they can plan better, be more efficient and have a clear guidance for outcomes to happen.