After months of deadlock, the Mexican Congress has approved the 1999 budget, which has been described as the most austere in modern times.

The vote came hours before the year-end deadline, averting a constitutional crisis and the prospect of the paralysis of the government of Latin America's second largest economy.

The budget was approved after an agreement between the governing Institutional Revolutionary Party and the conservative National Action Party.

Correspondents say the main issue for deputies was to find ways to make up for falling oil prices without raising taxes.