“The government continues to show its commitment to a stable debt/GDP ratio, maintaining moderate fiscal deficits. The sustained growth in fiscal revenues due to administrative measures, such as the fight against tax evasion, has helped Mexico’s fiscal position,” highlighted the agency in a report.
The agency highlighted in a report that public spending will increase 11.6% in real variation during 2023 thanks to high interest rates.
The high interest rates, which the Bank of Mexico has established in the face of accelerated inflation, will put pressure on the debt and the central bank will take the rate to levels of 10.75% next December, when the last monetary policy decision is made.
Fitch highlighted in the document that it expects the Mexican economy to grow 2.5% in 2022 and 1.4% in the following year.
“Growth continues to be hampered by slow investment, partly because of continued political noise and regulatory uncertainty, especially in the energy sector,” he noted. In the following months, the challenge will be the slowdown of the main global economy, the United States, which is also Mexico’s main trading partner.
Fitch expects the United States to face a recession in mid-2023.
