07072020Tue
Last updateFri, 03 Jul 2020 9am

Coronavirus plunges Jalisco government into bigger debt

The Jalisco government has received authorization to solicit a 6.2-billion-peso ($US279 million) loan to offset spending redirected to the Covid-19 emergency, as well as from loss of tax revenue and federal funding.

On May 22, the state Congress voted 28-10 to approve the credit, which will be repaid over 20 years at a high rate of interest.

The credit will be combined with other resources to create a money pool of around 18 billion pesos to be invested in infrastructure projects throughout the rest of the year, Governor Enrique Alfaro announced Wednesday. The emphasis will be placed on construction projects, he said, because these have a job creation “knock-on effect.” The governor’s eventual aim is to create some 90,000 jobs, although business and industrial sectors in Jalisco expect the pandemic to leave 150,000 people in the state out of work.

The state government has been wrestling with the task of raising more funds ever since the 40-member Mesa Interinstitucional de Reactivación Económica (Inter-institutional Committee for Economic Reactivation) projected a 5.8-billion-peso post-Covid-19 budget deficit, which includes an estimated three billion pesos diverted to the coronavirus pandemic.   

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