Fitch Ratings has recently reaffirmed Mexico’s long-term foreign currency rating at BBB-, highlighting the country’s prudent macroeconomic policies.
Additionally, robust external finances bolster this assessment. Despite this, concerns linger over weak governance indicators and subdued long-term growth.
Moreover, the rating agency anticipates fiscal risks. In a recent analysis, Fitch discussed the potential negative impact of constitutional reforms proposed by President Claudia Sheinbaum.
These reforms include implementing popular votes for Supreme Court judges, a significant shift in the judiciary system.
Furthermore, the upcoming U.S. elections introduce additional risks. Notably, Donald Trump, the former U.S. President and Republican candidate, has indicated plans to impose tariffs on imports.
Consequently, escalating trade tensions could particularly affect Mexico, given that 80% of its exports are U.S.-bound.
As for economic projections, Fitch expects Mexico’s GDP growth to slow down to 2.0% in 2024.
Subsequently, it may further decelerate to 1.8% in 2025. These forecasts take into account a potential economic downturn in the U.S. and tighter fiscal and monetary policies.
Nevertheless, Fitch sees potential opportunities in nearshoring. Specifically, multinational companies are reconfiguring their production chains to be closer to their primary consumer markets.
This strategic shift could benefit Mexico’s economic landscape in the coming years.
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This article was produced by The Rio Times’ automated AI newsroom. Editorial responsibility: Matthias Camenzind, Publisher and Editor-in-Chief. How we use AI · Report an error