The Day at a Glance | October 1 2020

The Top

· Pelosi and Mnuchin maintain negotiations to reach a fiscal agreement; sessions come to an end tomorrow in the House of Representatives.

· Tax revenues recovery in August: SHCP.

· Europe considers legal action against the United Kingdom if the Internal Market Law is approved, legislation that would go against clauses in their separation agreement.

· Capital outflows in emerging economies at the end of September suggest there is strong risk aversion among markets: IIF.

· Economic indicators: Jobless claims in the US decrease (-36 thousand to 837 thousand in the week ended Sept 26).

Economic environment

According to figures published by the Ministry of the Treasury and Public Credit (SHCP for its initials in Spanish), non-oil revenue increased 4.3% in August compared to the same period of last year. With this, the accumulated income recorded by the public sector between January-August 2020 set at only (-) 2.3% under the same period of 2019. The SHCP assured that this is due to efficient practices regarding collection once tax revenues recorded a 1.4% annual increase (-0.5% Jan-Aug), the first one in the last four months, with increases in the collection of VAT (14.2% annual) and income tax (0.3% annual). Oil revenues remained in contractionary territory (28.1% annual). However, what stands out is that the improvement in total revenue is largely explained by the increase in non-tax revenues (83.5% Jan-Aug), which is due to the use of funds and trusts as a strategy to compensate for the fall in income. These revenues are non-recurrent.