The factor that ignited alarms was the fiscal deficit of more than 5% of GDP in 2024, well above the historical range of 2 to 3%. This detour raised the public debt in more than five points of GDP in a single year and generated pressures in the payment of interest, which already consume 17% of federal income, one of the highest levels between countries with investment grade.
The question we have and what we want to answer now is whether the reference level for the fiscal deficit onwards will be 2 or 3% again and when it would be reached at that level or if it would be higher and if it would be higher in a low growth context, that could generate persistent deterioration in debt metrics
Renzo Merino, an analyst responsible for Mexico’s sovereign qualification in Moody’s.
Moody’s has a base scenario that says the debt would be approaching 50% of GDP by 2027-28, depending on how much fiscal consolidation there is, in addition, does not include Pemex.
However, the Government has postponed that goal until 2028, maintaining by 2025 a deficit greater than 4%. That delay reinforces the pressure on the rating.
As for growth, the agency maintains as a 2% long -term reference, although in 2025 the expansion would be barely 1%, due to political uncertainty and low private investment. The potential of Mexico to grow more depends on resolving lags in productivity, security, informality and female labor participation, as well as the success of the review of the T-MEC.
Merino mentioned that in November a year has been completed since he made a modification to the sovereign, which was a negative perspective change. But for this 2025 some modification is difficult, it would be more by 2026 awaiting more Pemex information, fiscal consolidation and economic recovery.
Pemex will go down debt in 2027
A great challenge is the oil company. Roxana Muñoz, Moody’s analyst for the company, explained that the oil rating rose from B3 to B1, thanks to a multiannual financial support plan of the government.
The strategy includes four key operations:
– Precapitalized notes for 12,000 million dollars, to replace short -term debt due to long -term maturities.
– An investment fund of 13,300 million, destined to pay suppliers.
– Bond repurchase for 9.9 billion and capital transfers for 12,000 million
– A budget line of 14,000 million in 2026, to cover maturities.
If all of the above is specified, Pemex can lower its debt of 100,000 million dollars to around 78,000 million around 2027, with a saving of 1.5 billion in interest.
