A suburban train passes by a house in the Tlalnepantla de Baz borough of Mexico city in this Nov 7, 2014 file photo. [Photo/Agencies]

Mexican Minister of Finance Luis Videgaray announced Friday a decision to cut this year's budget and the pinch will be felt with the plans for construction of two key rail infrastructure in the country, including a high- speed train project.

The bid to build the high-speed train project, which is expected to cost $3.75 billion and believed to be the first in Latin America if completed, was won by a Chinese-led consortium in November but the bid was soon canceled by Mexican government due to domestic reasons of Mexico.

Another bidding for the high-speed railway project was reopened in the middle of this month.

The budget cut will not affect economic growth projections for the year, said the official, though it does entail "definitively canceling" a proposed trans-peninsular rail line linking the southeastern Mexican states of Quintana Roo and Yucatan, as well as the suspension of the high-speed train project designed to connect Mexico City, the national capital, with the central state of Queretaro.

Videgaray cited plummeting oil prices as one of the main reasons behind the 2015 budget cut by 124.3 billion pesos ($8.42 billion), or an equivalent of 0.7 percent of the country's gross domestic product.

Videgaray said the two rail projects nixed for now "not just because of the impact they would have on public finances in 2015, but above all because of the pressure they would place on public spending in the years following 2016”.