The upgrade of the United Mexican States to investment grade was prompted by: An improved fiscal/monetary policy mix. Policy consistency resulting from tighter fiscal policy assured macroeconomic stability in 2001, despite the sharp fall in the rate of growth of the economy and turbulence in emerging markets. This allowed for large capital inflows and a dramatic fall in interest rates (both in nominal and real terms) to historically low levels. Standard&Poor's expects this improved policy mix to continue in 2002 and over the medium term. Improved tax administration. Despite negative growth, improvements in tax and customs administration implemented by the Fox Administration have allowed increases in income and value added tax (VAT) collection well beyond those that could
