Fitch Ratings rules out changing Mexico’s sovereign debt rating ‘for the moment’

Tulum, Q. Roo.Fitch Ratings said Thursday that it is not considering reducing Mexico’s sovereign debt rating or moving it from its current level, investment grade – a risk-free instrument for investors –, said Gerardo Carrillo, regional director for Latin America of international public finances at Fitch, when speaking about the country’s outlook a few days before the change of government and once the reform to the Judicial Branch was approved.

Before the end of the year, the rating agency will consider a review of the rating outlook, which is currently stablesaid the executive, without anticipating the direction of the change.

Before a direct change in rating, What could happen is a change, positive or negative, in the outlook, but with the current stable outlook we are not seeing a potential downgrade of Mexico’s credit rating.he mentioned while participating in the 18th National Convention of the Association of Multiple Purpose Financial Companies of Mexico (Asofom).

He added that “it is likely that the reforms (of the so-called plan C) significantly affect Mexico’s institutional profile, but it is too early to assess the magnitude of the impact.

The reform that is most worrying and that makes the most noise is that of the Judiciary. We clearly see that this will have a negative impact on the institutional profile of the country, but it is too early to know the impact.

And according to the rating agency, the risk potential of the set of reforms that were presented by the Executive last February is undermine the investment and business climate by affecting the already weak rule of law.

Sheinbaum inherits a stable economy

Carrillo said that the new administration, which will be headed by Claudia Sheinbaum, will inherit a stable economy. We assume that a prudent monetary and fiscal policy will be maintained to contain macroeconomic imbalances and that the autonomy of the Bank of Mexico will continue to be respected..

However, he said, despite the strength of macroeconomic institutions, weak growth has been a challenge and a limitation to the sovereign rating. Average growth between 2000 and 2023 has been 1.7 percent, while in comparable countries it is 3.6 percent.