Fitch ratings on Thursday affirmed Mexico’s solvency at “BBB-” with a “stable” outlook, although there will be a rise in the budget deficit before 2024.
“Mexico’s rating is supported by a prudent macroeconomic policy framework, stable and sound external finances and a public debt-to-GDP ratio expected to remain below the ‘BBB’ median,” the rating agency said in its report.
At the beginning of the pandemic and the international oil price crisis Petroleum, in March and April 2020, the three main international rating agencies, Standard & Poor’s (S&), Fitch and Moody’s, downgraded Mexico’s credit rating.
Since then, Fitch has kept the rating at BBB- and S& at BBB, but Moody’s downgraded the rating to Baa2 a year ago amid fiscal and economic trends that were “persistently eroding” the country’s credit profile, as it explained at the time.
The ratings agency forecast on Thursday that Mexico’s GDP will grow 3.4% in 2023, after rising 3.2% in 2022, although it is expected to slow to 2.4% in 2024.
However, Fitch said it expects the government’s budget deficit to widen next year, which will also be influenced by, among other things, higher spending related to the budget deficit. Presidential elections in June.
“The agency expects that the overall deficit will contribute to a rise in debt.” Government growth to GDP will rise from 44.9% this year to 47.7% in 2024, representing a steady increase over the medium term, but is expected to remain below the ‘BBB’ median (currently 56 ) over the entire forecast period. he emphasized.
However, he did not expect a “major” political disruption during the election cycle to have a negative impact on growth prospects for 2024 and expected limited policy changes if the incumbent president were to fall. National Regeneration Movement (Morena) wins the elections.
According to him, the Mexican economy will continue to benefit from the arrival of foreign companies, a phenomenon known as proximity, and from solid consumption by the population.
Source: La Neta Neta
Karen Clayton is a seasoned journalist and author at The Nation Update, with a focus on world news and current events. She has a background in international relations, which gives her a deep understanding of the political, economic and social factors that shape the global landscape. She writes about a wide range of topics, including conflicts, political upheavals, and economic trends, as well as humanitarian crisis and human rights issues.
