UPDATE 1-Mexico panel approves elements of 2011 budget

(Recasts, adds background)

MEXICO CITY, Oct 19 (BestGrowthStock) – The finance committee in
Mexico’s lower house approved a budget plan on Tuesday evening
that will seek a higher budget deficit than a plan proposed by
conservative President Felipe Calderon.

The panel voted to allow the 2011 budget deficit to touch
0.5 percent of gross domestic product while Calderon wanted a
cap at 0.3 percent. The panel also voted to raise the 2011
estimated price of a barrel of oil to $65.40 — higher than the
estimate price of $63 a barrel that Calderon wanted.

The full budget plan is due to clear congress and be
presented to Calderon by the end of the second week of
November.

Calderon asked lawmakers to keep a lid on deficit spending
when he presented his 2011 budget in September, but opposition
legislators said more outlays were justified as Latin America’s
No. 2 economy struggles out of a deep recession.

Still, the populist Institutional Revolutionary Party
(PRI), which is the largest force in the lower house, backed
off some of its more ambitious plans for the budget — such as
reversing a 1 percentage point increase in the consumption
tax.

Analysts have cautioned Mexico not to let its budget
deficits swell since the nation has a low tax take and is
seeing its oil resources dwindle.

(Reporting by Miguel Angel Gutierrez, written by Patrick
Rucker)

UPDATE 1-Mexico panel approves elements of 2011 budget