Growing macroeconomic stability. Recent improvement in the sovereign's debt profile. Ample external liquidity. The lack of political consensus on policies to boost growth prospects. The government's narrow non-oil tax base, less than 11% of GDP, and resulting fiscal inflexibility. A weak institutional framework that constrains GDP growth prospects. 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
