The ratings on the United Mexican States (Mexico) reflect the government's track record of cautious fiscal and monetary policy that has contributed to low government deficits and inflation, bolstered economic resiliency, and contained external debt levels. The ratings also reflect Mexico's limited fiscal flexibility and modest medium-term growth prospects. About 35% of total budgetary revenues come from the oil sector, rendering the government vulnerable to volatile oil prices and a potential decline in oil production over the medium term, while the non-oil tax base remains low. The Mexican economy grew 3.9% in 2011, with domestic demand gaining further traction while net exports moderated. Standard&Poor's Ratings Services expects growth to decelerate in 2012 toward 3%--in line with the deceleration
