US Elections Could Affect PEMEX DebtBy Paloma Duran | Mon, 11/09/2020 - 15:50
PEMEX reported that the US election could change Mexico-US relations and it is possible that new US policies will complicate the country’s financial situation and its capacity to pay its major debt, reports El Universal.
The NOC battles a financial debt of US$110.3 billion due to a 32 percent decrease in sales, a reduction of 41 percent in its domestic sales and a 18.6 percent decrease in exports, reported Mexico Business News. A renegotiation of contracts and business plans following the elections could jeopardize the company’s profits, reported El Universal.
PEMEX emphasized that the Mexican government and Congress are discussing reforms that will affect economic conditions in the oil and gas industry and that until those reforms are implemented, the company cannot predict the impact of its operations nor its ability to pay the debt.
Currently, Mexico is the US’ second-largest trading partner. In September, Mexico's exports to the US increased by a 1.06 percent for the first time since the beginning of the pandemic. Biden’s victory would create uncertainty in Mexico. The presidential candidate told the NY Post that he supports USMCA but criticized NAFTA for generating a large trade deficit with Mexico, reported Mexico Business News.
PEMEX said that 28 percent (US$30.9 billion) of its debt has to be paid in the next three years. However, the elections can have an impact on the exchange rate, complicating the growth of the national economy and its source of funding, reported El Universal.
President López Obrador said the US elections will not affect the country, however. “We are sure that, in the face of any outcome in the US elections, we have secured economic and financial stability. Our economy is solid and healthy and foreign investors have confidence in Mexico,” reported Mexico Business News.