RIO DE JANEIRO, BRAZIL – Moody’s on Friday downgraded Mexico’s rating to Baa2 from Baa1 and changed the outlook to stable from negative.
The agency justified the rating downgrade by citing economic and fiscal trends that are likely to gradually and persistently undermine the country’s overall credit profile, placing it in line with other countries in the Baa2 group.
Moody’s believes that the country’s economic activity continues to be held back by weak investment prospects and further structural rigidities.
It also points out that the country’s economy has been “scarred” by the pandemic that is unlikely to be reversed, resulting in a lower GDP trend than before the health crisis.
Moody’s projects that the Mexican economy will grow by about 2% between 2022 and 2024 and return to 2019 levels by 2023.