Fitch affirms Mexico’s credit rating

The agency highlighted that “the government continues to demonstrate its commitment to achieving a stable debt-to-GDP ratio, and to maintaining a moderate fiscal deficit. Sustained growth in fiscal revenue due to administrative measures, such as the fight against tax evasion, has helped Mexico’s fiscal position.” in a report.

And the agency stated in a report that public spending will increase by 11.6% in real variance during 2023, thanks to higher interest rates.

The high interest rates, set by the Bank of Mexico in the face of accelerating inflation, will put pressure on debt, and the central bank will take the rate to levels of 10.75% next December, when making the last decision on monetary policy.

Fitch highlighted in the document that it expects the Mexican economy to grow by 2.5% in 2022 and 1.4% the following year.

He noted that “growth continues to be hampered by sluggish investment, in part due to continued political noise and regulatory uncertainty, particularly in the energy sector.” In the coming months, the challenge will be the slowdown of the main global economy, the United States, which is also Mexico’s main trading partner.

Fitch expects the US to experience a recession in the middle of 2023.

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