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S&P Global Ratings on Tuesday revised Mexico’s credit outlook to “negative” from “stable”, while affirming its long-term sovereign ratings at “BBB” for foreign currency debt and “BBB+” for local currency obligations.
According to the agency, the outlook revision reflects the risk of a very gradual fiscal consolidation, driven largely by weak economic growth. This combination could result in government debt increasing more quickly than anticipated and in a rising interest burden.
Persistently low per capita growth remains a central constraint on Mexico’s credit profile. At the same time, subdued economic activity, inflexible public spending, and the fragile financial condition of the country’s largest state-owned enterprises are undermining fiscal flexibility and contributing to higher debt levels.
Mexico’s sovereign credit standing with other major agencies remains investment grade: Moody’s rates the country at Baa2 with a negative outlook, while DBRS Morningstar assigns a BBB rating with a stable outlook.
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