Moody's lowers Mexico's rating and changes outlook to negative

Moody’s lowers Mexico’s rating and changes outlook to negative

The agency expects the country’s economic activity to continue to be affected by the weak investment outlook that prevents the damage caused by the pandemic from being reversed.

Moody’s estimates that despite the fiscal management of Mexico, which has had a moderate increase in its debt, interest will be affected by the increase in interest rates.

“In the future, Mexico’s fiscal strength will be affected in an increasingly obvious way by greater rigidity in public spending associated with the government’s decision to maintain support for state-owned companies such as Pemex, increase expenditures related to pensions and maintain unaltered spending on labeled capital and a low level of financial buffers due to the fact that the fiscal stabilization funds have practically been exhausted,” he added.

For the agency, prudent macroeconomic management has supported sovereign creditworthiness, but the institutional framework has been undermined as the government has moved to restrict the independence of some regulators through various measures, including budget cuts.

The Undersecretary of Finance, Gabriel Yorio, shared the news on his Twitter account and highlighted that despite the cut in rating, Mexico is still two degrees above the investment level on the Moody’s scale.

“To put them into perspective, Fitch has us one notch up and S&P two notches up,” he wrote on the social network.

Despite the reduction in the sovereign debt rating by Moody’s, the Ministry of Finance said that Mexico’s debt has a robust position in international markets and assured that it has sufficient financial buffers to face global risk scenarios.

“The Ministry of Finance will continue to be committed to the strength of public finances and its debt,” the agency said in a statement.

cookie : true, xfbml : true, version : 'v8.0' });

FB.AppEvents.logPageView();

};

(function(d, s, id){ var js, fjs = d.getElementsByTagName(s)[0]; if (d.getElementById(id)) {return;} js = d.createElement(s); js.id = id; js.src = "https://connect.facebook.net/en_US/sdk.js"; fjs.parentNode.insertBefore(js, fjs); }(document, 'script', 'facebook-jssdk'));



Source link

Previous Story

Nicaraguan police take buildings from three canceled NGOs

Latest from Mexico