Morelia, Michigan, June 20, 2021. – Near the end of Silvano Aureoles’ term, Michoacan will risk an unexpected weakening of its ability to meet debt repayment needs on the projected horizon of 2021-2025.
This was substantiated by the report of the rating agency Ficht Ratings, which indicated that contributions and federal contributions represented, on average, 93.9% of the operating income from 2016 to 2020 for the entity.
“Although 2020 shows improved liquidity, it is also true that the cash reported to the Ministry of Finance includes resources consistent with the provision of loans contracted in 2020 that will be exercised in 2021. The agency estimates this as a factor.” Weaker by keeping the index below 0.75x in at least one of the last two fiscal year closes.
Credit rating agency Fitch said Michoacan has a history of complications in year-end closings, which have worsened since 2018.
For this year, Michoacan has advanced with a deficit budget of about 7 billion pesos, and projected resources for 2021 are expected to be exhausted by August.
The deficit, according to Governor Silvano Orioles, is the gap that generates teacher pay.