Research Update: Mexico 'BBB' Foreign Currency And 'BBB+' Local Currency Long-Term Ratings Affirmed; Outlook Remains Negative

Mexico is poised to close 2021 with a 5.8% rebound in GDP, which leaves a still sizable output gap coming out of the pandemic-induced recession in an economy that has had a track record of subpar GDP growth. As President López Obrador heads into the second half of his six-year term, we assume continuation of cautious macroeconomic management that has limited the rise in debt and deficits, with net general government debt holding steady at about 46% of GDP over the next three years. We affirmed our 'BBB' long-term foreign currency and 'BBB+' long-term local currency sovereign credit ratings on Mexico. The outlook remains negative, indicating the risk of a downgrade over the coming year due to more pronounced and

...- Mexico is poised to close 2021 with a 5.8% rebound in GDP, which leaves a still sizable output gap coming out of the pandemic-induced recession in an economy that has had a track record of subpar GDP growth. - As President L=pez Obrador heads into the second half of his six-year term, we assume continuation of cautious macroeconomic management that has limited the rise in debt and deficits, with net general government debt holding steady at about 46% of GDP over the next three years. - We affirmed our '###' long-term foreign currency and '###+' long-term local currency sovereign credit ratings on Mexico. - The outlook remains negative, indicating the risk of a downgrade over the coming year due to more pronounced and lasting contingent liabilities associated with managing complex fiscal challenges at Petr=leos Mexicanos (PEMEX) and Comision Federal de Electricidad (CFE), or from uncertainties in the business climate that would keep growth subdued....

Research Update