Mexico’s investment rating remained at BBB-
2022.11.18 13:59
Mexico’s investment rating remained at BBB-
Budrigannews.com – Fitch Ratings confirmed Mexico’s long-term local and foreign currency issuer Default Rating (IDR) on “BBB-” to confirm its stable rating outlook.
“It is predicted that Mexico’s rating will remain stable with a cautious macroeconomic policy framework, stable and robust external finances and a level of government debt/GDP below the ‘BBB’ median,” the rating agency said in a statement.
Fitch added that Mexico’s ratings are constrained by weak governance indicators, muted long-term growth, potential micro-policy interventions affecting investment prospects, and the possibility of contingent debt from the state oil company Petroleos Mexicanos (Pemex).
He also said that the government of President Andres Manuel López Obrador expects to continue to commit to financially supporting Pemex as part of its priorities to strengthen the role of state-owned enterprises in the energy sector.
The way rating agencies rated Mexico under the leadership of López Obrador, a left-wing populist who prides himself on being a fiscal conservative, was seemingly almost inconsistent.
The S&P Global (NYSE:) rating raised Mexico’s long-term outlook from negative to stable, confirming the BBB long-term foreign currency rating and the BBB Plus long-term local currency rating. In the same month, Moody’s (NYSE:) Investors Service cut Mexico’s credit rating by a notch to “Baa2”, predicting weak investment.
In a statement on Friday, Fitch predicts that Latin America’s second-largest economy will grow at a real GDP basis of 2.5% in 2022 and 1.4% in 2023.
Fitch also said he expects the Bank of Mexico to reach 10.75 percent and will continue to raise key interest rates by the end of 2022.
Depending on the rating, the Mexican Ministry of Finance has issued a “(ed)” Mexican Commission on good management of finances, allowing it to continue with good access to the international and domestic markets.
