Fri | Dec 2, 2016

Oil price drop hurts

Published:Saturday | January 31, 2015 | 10:08 PM

Mexico

MEXICO CITY (AP) -- Mexico said last Friday it will cut government spending by US$8.4 billion this year because of a drop in revenues due to declining oil prices.

Finance Minister Luis Videgaray said the government will put on hold plans for a high-speed rail project that has been marred by allegations of favouritism.

Mexico has seen prices for its oil fall in recent months from around US$100 to US$38.42 per barrel. The government relies on oil revenues for about a third of its budget.

The cuts, to be borne mainly by the state-owned oil and electricity companies, are equivalent to about 0.7 percent of Mexico's GDP.