Salinas Offers First-Ever Balanced Budget : Mexico: The president pledges to slash inflation with his $93-billion spending plan.

Promising to slash inflation to a single digit, President Carlos Salinas de Gortari Friday sent Congress Mexico’s first balanced budget.

The $93-billion 1992 budget includes a $2-billion surplus, not counting proceeds from sales of state-owned companies. After adjustment for inflation, federal spending will increase by 4% over this year.

The congress, controlled by Salinas’ Institutional Revolutionary Party, is expected to overwhelmingly pass the budget.

Controls on government spending are a key part of the Salinas economic program, which has dramatically changed international perceptions of Mexico since he took office three years ago with triple-digit inflation, a deep budget deficit and a crushing international debt burden.

Salinas renegotiated the debt, cut federal spending--partly by selling off subsidized companies--and attacked inflation through an innovative program of wage and price controls based on agreements among labor, business and government leaders.

Indicative of the country’s turnaround, Mexico this week issued $177.5 million in bonds on the London market, becoming the first Latin American country to obtain credit there since the Third World debt crisis began in 1982.

Standard & Poor’s credit rating agency has added Mexico to its service, although it classifies the government’s ability to make debt payments as “only adequate.”

Mexican officials are even beginning to talk about a fixed exchange rate for the peso, now devalued daily against the dollar to reflect differences in U.S. and Mexican inflation rates.

Despite those bright prospects, Standard & Poor’s noted that “considerable economic challenges . . . remain.” Besides a growing trade deficit and a still considerable debt burden, there is also the nagging problem of inflation. Officials recently acknowledged that the government will miss the 15% inflation target set for this year.

Continuing the fight against inflation was the major theme of both Friday’s budget message and the renewal early this week of the economic stability pact, as the wage and price control agreements are called here.

Bringing inflation down to levels comparable to those in the United States and Canada is considered essential if Mexico is to benefit from the free trade agreement that the three countries are negotiating. Inflation makes Mexican goods more expensive than products offered by the country’s principle trading partners.

The pact also addressed companies’ concerns that Mexico’s 15% sales tax made its goods less competitive than imports. The sales tax was cut to 10%.

Neither the budget nor the pact renewal offered Mexicans much relief from the austerity of the last nine years. The minimum wage increased only 12%. The budget is aimed at achieving growth exceeding 4%, a rate higher than the population increase but not high enough to supply the 800,000 new jobs a year that Mexico’s youthful population demands. What relief the budget offered was aimed at the poorest Mexicans, with tax cuts for those earning less than $20 a day.

Sales of 252 remaining government-owned companies will continue, but proceeds will be placed in a contingency fund, unavailable for general use. None of the $7.6 billion raised in divesting half of the 18 commercial banks will be included in the annual budget.