Moody’s changed the outlook on Mexico’s rating to negative from stable.
The credit rating agency noted a weakening of the institutional and policymaking framework that could undermine the government’s fiscal and economic results.
It said deteriorating debt affordability and greater rigidity in public spending make fiscal consolidation difficult, following a rise in the public deficit this year, a departure from a history of low deficits regardless of economic pressures.
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He added that reform of the Judiciary could weaken the checks and balances of the judicial system, with a possible negative impact on the country’s economic and fiscal strength.
He also stated that there is a greater probability that contingent liabilities derived from Pemex will materialize on the government’s balance sheet and, at the same time, will not restore the sustainability of the oil company’s long-term debt and, therefore, maintain risks. tax for the government.
Moody’s maintained Mexico’s rating at Baa2, reflecting its view that Mexico’s credit profile continues to benefit from solid economic strength that will continue to be supported by the diversity of the economy, as well as the potential benefits of nearshoring.
“Moderate macroeconomic imbalances, thanks to a history of relatively prudent fiscal and monetary policies, support the rating,” he said in a report.
The Treasury indicated in a statement that the agency did not have at the time the proposed fiscal policy for next year, or the projections that the agency will deliver to Congress this Friday as part of the 2025 Economic Package.
“This situation suggests that Moody’s analysis and perspective could have benefited from a more detailed and updated evaluation,” he considered in a statement.
Hacienda added that Moody’s reaffirmed the sovereign rating due to the “solid track record of the Mexican government in implementing fiscal and monetary policies that guarantee macroeconomic stability.”
He asserted that the Mexican economy is supported by solid pillars of diversification, sustained growth, a flexible exchange rate and a resilient banking system, elements that strengthen its capacity to absorb external shocks and protect economic stability.
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