By Anthony Esposito
MEXICO CITY (Reuters) – Fitch Scores on Friday affirmed Mexico’s long-term local-currency and foreign-currency issuer default ranking (IDR) at ‘BBB-‘, with a steady ranking outlook.
“Mexico’s ranking is supported by a prudent macroeconomic coverage framework, steady and strong exterior funds, and authorities debt/GDP projected to stay steady at ranges beneath the ‘BBB’ median,” the scores company stated in a press release.
Fitch added Mexico’s ranking is constrained by weak governance indicators, muted long-term progress, potential micro coverage intervention affecting funding prospects, and the doable contingent liabilities from state oil agency Petroleos Mexicanos (Pemex).
It additionally stated it expects President Andres Manuel Lopez Obrador’s authorities will stay dedicated to financially supporting Pemex, as a part of its precedence to strengthen the position of state-owned firms within the vitality sector.
There was seemingly little consistency in how scores companies have graded Mexico underneath the tutelage of Lopez Obrador, a leftist populist who prides himself on being a fiscal conservative.
S&P International Scores upped Mexico’s long-term outlook to steady from detrimental in July and affirmed its BBB long-term overseas foreign money ranking and BBB-plus long-term native foreign money ranking. The identical month, Moody’s Traders Service lower Mexico’s credit standing by a notch to “Baa2”, forecasting weak funding.
In Friday’s assertion, Fitch forecast Latin America’s second largest economic system will develop in actual GDP phrases by 2.5% in 2022 and 1.4% in 2023.
Fitch additionally stated it anticipated the Financial institution of Mexico to proceed mountain climbing its key rate of interest, projecting it’s going to attain 10.75% by end-2022.
In response to the ranking, Mexico’s finance ministry stated in a press release it “verify(ed)” Mexico’s dedication “to the great administration of public funds, permitting the continuation of favorable entry to worldwide and nationwide markets.”
(Reporting by Anthony Esposito, Modifying by Isabel Woodford)
