The Mexican Institute of Finance Executives (IMEF) said that Mexico is heading to have a credit rating of a speculative degree in 2027, which will make credit for the Government, companies and citizens.
“If you add maturities (debt) in 2030 and the pressures of 2027, it is very likely that before 2030 we reach 60 percent of the debt level, which merits a decline in the credit rating,” said Víctor Manuel Herrera Espinosa, president of the National Committee of Economic Studies of the IMEF.
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Each of the countries with a debt level of 60 percent is with a credit rating in BBB- or BB+, that is, they are at the border of the investment grade and speculative degree, said the economist.
“We are reaching a level that we had not seen since 1992, when it began grades in BB+. Since 1992 we have not had a speculative rating and we go there,” he said.
He said that with a speculative grade rating, credit and deadlines for the payment of debt will be more short for the government, “state authorities suffer, banks, companies and everyone.”
In 2016, Brazil had a speculative rating, which caused the exchange rate to suffer an important adjustment of 2.24 reais to 4 reais, that is, it is a difference of 80 percent: “It is not a scenario that we want to have in Mexico.”
Gabriela Gutiérrez Mora, president of IMEF, considered that they are not surprised with the extended fiscal deficit of 4.3 percent in 2025 compared to the original expectation of 3.9 percent.
“Our estimate has always been that the extended deficit would be around 4.0 and 4.5 percent of GDP for this year,” he said.
The Financial Requirements of the Public Sector (RFSP) expected by 2026 are estimated at 4.1 percent.
“An important and continuous deviation of the levels of deficit compatible with the current qualification, would compromise the stability of the sovereign rating, which is already pressured by extraordinary support both to Pemex and CFE, as mentioned by the same qualifier in her statement,” recalled the president of the IMEF.
“A fiscal deficit always implies greater debt, which is why maintaining it at a level of between 3 percent and 3.5 percent, more or less remains stable with the growth of a country in that proportion,” he said.
If Mexico maintains 4 percent fiscal deficit, because “in 2027 the Government of Mexico will have more pressure to spend for the intermediate elections and there are many people who are thinking that they will have more than 4 percent of the deficit and accelerate more than 4 percent towards the end of the six -year period,” he said.
A border to pass the investment grade to the speculative degree for an emerging country is 60 percent of the debt as a proportion of the gross domestic product.
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“Our peers in Latin America and other regions would be Brazil, South Africa and Colombia, who already exceeded 60 percent of GDP debt and are at 70 percent and up to 80 percent and has the BB rating,” he said.
“The only torque we have with BBB, with a 50 percent debt is Indonesia and Mexico is above that level of qualification,” said the president of the National Committee of Economic Studies of IMEF.
