MEXICO CITY (Reuters) -Mexico’s government on Wednesday proposed sharply reducing the tax burden for state oil firm Petroleos Mexicanos and forecast economic growth of 4.1% for 2022, as Latin America’s second largest economy continues to recover from a COVID-19-induced slump. The finance ministry’s 2022 draft budget, which it presented to Congress earlier in the day, laid out a profit sharing rate (DUC) - effectively a tax paid to the government - of 40% for the oil giant known locally as Pemex. The DUC, the largest payment the firm makes to state coffers, has been gradually reduced from 65% in 2019, to 58% in 2020 and 54% in 2021. Leftist oil nationalist President Andres Manuel Lopez Obrador has staked his reputation on reviving Pemex, which has been a powerful symbol of Mexican self-reliance since its creation in 1938. Mexico in 2020 suffered its steepest recession in almost 90 years as the pandemic hit across all sectors of the economy, with gross domestic product (GDP) shrinking by some 8.5%. The government this year expects to make up most, but not all of the ground lost, as export activity and the spillover effects of massive economic stimulus spending in the United States, Mexico’s top trade partner, help to drive a recovery. Presenting the new budget to Congress, Finance Minister Rogelio Ramirez de la O said the plan would focus on the well-being of Mexicans, financial stability and support for regional development, reiterating that no new taxes would be created. The budget’s forecast “growth rate of 4.1% for 2022 seems very optimistic. Tax authorities will improve tax take but it won’t be enough,” said Raul Gonzalez, a former finance ministry official, who now teaches economics at the Tec de Monterrey University. The peso was little moved after the initial presentation, trading broadly flat against the dollar. Reporting by Anthony Esposito and Stefanie Eschenbacher; Additional reporting by Ana Isabel Martinez; Editing by Dave Graham and Sandra Maler Our Standards: The Thomson Reuters Trust Principles.