Mexico's Credit Outlook Shifts to Negative Amid Fiscal Concerns and Trade Uncertainty
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Mexico's credit rating was adjusted to negative by S&P Global Ratings, citing concerns over slow economic growth and rising public debt amid ongoing US-Mexico-Canada Agreement (USMCA) negotiations and tariff policies under President Donald Trump.
The agency highlighted fiscal constraints, budget restrictions, and moderate public debt increases since January as key factors behind the downgrade. Recent data shows a 0.8% contraction in Mexico's economy compared to the previous quarter, intensifying worries about potential slowdown in Latin America's second-largest market.
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Analysts note that while trade relations between Mexico and the US remain stable, uncertainty around USMCA renegotiations undermines investor confidence. The government's fiscal deficit stands at 4.3%, with public debt reaching 52.6% of GDP.
Official statements emphasize continued support for state-owned enterprises like Pemex and the Federal Electricity Commission, despite concerns about long-term fiscal discipline. The finance ministry reaffirmed its commitment to maintaining investment-grade status.
Credit agencies have signaled potential further downgrades if fiscal deficits persist without timely adjustments, highlighting risks to Mexico's macroeconomic stability.