...- Despite the pronounced hit to the Mexican economy this year, with a contraction of about 9% of GDP, and our expectation for a slow recovery, the government continues to pursue cautious countercyclical fiscal and monetary policies. - While net general government debt rises sharply, to about 50% of GDP this year from 42% in 2019 amid the largest hit to growth since the Great Depression, the general government deficit should be around 3% of GDP in 2020, much lower than peers given the government's measured policy response. - We are affirming our '###' long-term foreign currency and '###+' long-term local currency sovereign credit ratings on Mexico. - The outlook remains negative, indicating the risks of a downgrade over the coming 12-18 months as the likely subdued economic recovery heightens complex fiscal policy trade-offs: rising pressure from PEMEX's weak finances (which poses a potential contingent liability for the sovereign), a low non-oil tax base, and spending rigidities....
