Mexican Credit Score Stabilizes

Credit rating agency Fitch has reaffirmed Mexico's long-term foreign currency debt rating at BBB-, putting the country a level above investment grade, with a stable outlook. This assessment is based on Mexico's solid macroeconomic stability and the stable trajectory of its debt relative to its Gross Domestic Product (GDP). Fitch forecasts a 2.8% growth of Mexico’s GDP in 2023 and a 1.8% in 2024.

Fitch's endorsement highlights Mexico's economic resilience and its favorable position compared to other countries with a similar rating (BBB). Furthermore, the agency does not anticipate any changes in the credit rating over the next 12 to 18 months, providing stability and confidence to investors and market participants worldwide. According to the agency, this achievement is the result of a consistent commitment by the government of President Andrés Manuel López Obrador to maintain moderate public deficits and a solid fiscal stance.

The agency also recognizes the resilience of Mexico's tax revenues, which have benefited from a reduction in the fiscal stimuli of gasoline, that followed the decline international oil prices. Despite pressures on expenditures due to high interest rates and increased costs related to infrastructure projects, the Mexican government has been able to maintain the budgetary flexibility necessary in order to ensure the stability of its fiscal indicators.

According to Fitch, Mexico's current economic performance is being driven by a strong labor market and robust external demand. However, the agency warns of a possible economic slowdown in the future. To mitigate a potential downfall, Fitch advises Mexico to continue promoting public policies that foster greater private investment and ensure economic stability for the country. The Mexican government seems determined to maintaining an investment-welcoming financial environment and to promote confidence in both domestic and international markets.

“External demand continues to provide economic support to Mexico. However, Fitch expects it to face potential challenges given the current economic slowdown in the US, which affects both manufacturing export demand and remittances, as well,” says Gabriel Yorio, Deputy Minister of Finance and Public Credit.

Fitch's reaffirmation of Mexico's credit rating is a positive endorsement of the country's financial stability. Its macroeconomic strength, responsible debt management and resilient tax revenues inspire confidence in the markets and strengthens the country's credit position.