IMF Recognizes Mexico’s Stable Debt

The International Monetary Fund (IMF) recognized Mexico’s proper debt management, said Minister of Finance Rogelio Ramírez de la O during the G20 Ministers of Finance Meeting.

Since the beginning of the pandemic, international pressure on emerging and developed countries has forced them to increase their public debt for a countercyclical policy. Ramírez explained that current levels of debt are disproportionate, as the debts of developed countries are almost three times those of emerging markets, while total interest remains practically the same for both.

“Mexico was very early in terms of raising interest rates in the face of inflation, and it has done well in that respect as well. So, I would characterize the situation as a fairly robust one,” said Tobias Adrian, Financial Counselor and Director of the Monetary and Capital Markets Department, IMF, via GFSR Press Briefing 2022 IMF Spring Meetings.

Ramirez de la O also highlighted that the Latin American region is suffering from very complex credit ratings, specifying that 35 percent of the countries in the region suffered a rating reduction by at least one of the three main rating agencies. Even though Mexico did not suffer a downgrade, the signs show a particular trend for emerging nations around the world.

“Without intending to criticize all the actions applied to mitigate risks, emerging economies have faced conditions that hinder the actions they have undertaken to seek to refinance their debts. Due to the above, a call on the G20 and the international financial architecture was placed to create a working group to seek alternatives that allow, especially emerging countries, to have a sustainable scheme in managing their debt,” explained Ramirez de la O according to SHCP.

Randa Elnagar, Senior Communications Officer, IMF, also added that Mexico completed two sequential years with capital outflows.