Fitch Signals Possible Rating Boost for Mexico Amid Debt Control Efforts

Mexico could see its credit rating improve if it continues to manage its government spending and debt more carefully, according to Fitch Ratings.

This matters because a better credit rating would make it cheaper for Mexico to borrow money and could boost confidence among investors and businesses.

Mexico’s government has promised to reduce its budget deficit—the gap between what it spends and what it earns—from almost 6% of its economy in 2024 to about 3.2% in 2025.

This means the government plans to spend less and borrow less, which is what credit rating agencies like Fitch want to see. The Ministry of Finance confirmed that Mexico’s public debt now stands at 60.7% of GDP, its highest level in six years.

Officials say they will cut back on new projects and focus on paying down debt. Paying interest on this debt already costs the government 1.4 trillion pesos a year, and if Mexico’s rating falls, those costs could rise even more.

That would leave less money for things like schools, hospitals, and infrastructure. On the other hand, if Mexico’s rating goes up, the government could save money on interest and have more to spend on important services.

However, there are challenges. Mexico’s economy grew just 1.4% in 2024, down from 3.3% the year before. The government expects growth between 1.5% and 2.3% in 2025, but many experts think it could be less.

Slower growth makes it harder to collect taxes and pay off debt. Another big worry is Pemex, the state oil company. Pemex lost over 43 billion pesos in the first part of 2025, and its total debt is now more than $100 billion.

The government often has to help Pemex pay its bills, which adds to Mexico’s financial strain. Mexico’s tax revenue is also among the lowest in the world compared to the size of its economy.

Without changes to how taxes are collected, it will be tough for the government to keep its promises on debt and spending. This story matters for everyone in Mexico. If the government can keep its finances under control, funding public services will be easier.

It will also help attract new investment. If not, borrowing could become more expensive, and there could be less money for things people need. Fitch and other agencies will keep watching closely to see if Mexico sticks to its plans.