UPDATE 1-Mexican finance minister wants low debt in budget

(Rewrites throughout, adds quotes, background)

MEXICO CITY, Aug 19 (BestGrowthStock) – Mexican President Felipe
Calderon will propose cutting the deficit in 2011 as the
country recovers from a deep recession, Finance Minister
Ernesto Cordero said on Thursday.

Calderon is due to submit his budget plan in early
September. This year’s budget calls for a deficit equivalent to
2.8 percent of gross domestic product.

“We think that we should continue that tendency and send a
budget that cuts the deficit level to something lower than”
last year, Cordero said.

Earlier this year, Cordero said the government was planning
a fiscal reform bill, but he has since backtracked, saying the
government proposal must take into account the political
climate.

“Everything is on the table,” Cordero said. “It’s important
that we send a proposal that can win a majority in Congress.”

Mexico’s main opposition party, the Institutional
Revolutionary Party, has vowed to oppose extending the
country’s value-added tax to food and medicine after shooting
down the proposal when last hatched by Calderon in 2009.

Mexico is limping back from one of the steepest economic
contractions seen anywhere in the world last year. Cordero said
it was crucial for Mexico to maintain fiscal discipline so that
investors remain confident in its ability to pay its debts.

“Our budget will put a priority on stable finances,” he
told reporters. “It would be irresponsible, at this moment, to
put at risk the strong finances that Mexico has established.”

Cordero repeated his view that the Mexican economy will
grow between 4 and 5 percent this year.

Mexico is due to report its gross domestic product for the
second quarter of 2010 on Friday at 9 a.m. local time (1400
GMT).
(Reporting by Patrick Rucker and Jason Lange; Editing by
Leslie Adler)

UPDATE 1-Mexican finance minister wants low debt in budget