Fitch rating agency announced on Friday that it had affirmed Mexico’s credit rating at ‘BBB-‘ with a stable outlook, citing a prudent macroeconomic policy framework and stable and strong external finances.
The risk assessment agency predicted economic growth for Mexico of 2.5 percent in 2023 and 1.8 percent in 2024, down from the 3 percent reported last year.
“External demand continues to provide support, though Fitch anticipates the economy will face challenges from the current economic slowdown in the United States, affecting both the demand for manufactured exports and remittances,” the agency stated in a report.
The relocation of global value chains, or “nearshoring,” represents “a significant growth opportunity for Mexico” amid manufacturers’ intentions to have shorter, more resilient supply chains, Fitch added.
The administration of President Andrés Manuel López Obrador continues to demonstrate a strong commitment to moderate fiscal deficits, which keep the debt-to-Gross Domestic Product (GDP) ratio stable.
“Fitch does not anticipate a change in the stance of fiscal policy before the 2024 presidential elections,” it underscored.
In a separate statement, Mexico’s Ministry of Finance said the affirmation of the sovereign debt would enable Mexico to continue with favorable access to domestic and international markets.
The Ministry of Finance highlighted that the stable outlook reflects the agency’s expectation that there will be no changes in the rating over the next 12 to 18 months.