The ratings on the United Mexican States are based on our expectation that volatility in international financial markets and the downturn in U.S. and global economic activity will not undermine Mexico's commitment to macroeconomic stability nor weaken its creditworthiness. The combination of a sharp slowdown in Mexico's real GDP growth in 2009 along with lower oil revenues will place greater pressure on the government's budget. Mexico has limited room for countercyclical fiscal policy, and it has used some of this leeway in the recently revised 2009 budget. To contain the potential increase in public-sector indebtedness and to sustain market confidence, we expect the government to take timely steps to address any budgetary shortfall and to allow for sufficient capital investment
