Mexico will maintain credit rating in case the US sees a recession: S&P

Mexico City – Mexico will maintain the credit rating in the scenario of the United States falling into recessionThe country’s response to the downturn in the US economy is supposed to be fiscal wisdom, he said Lisa SchenellerDirector General of the Department of Sovereign Ratings and Economist for Latin America in S&P Global Ratings.

For S&P, a recession in the US is not a primary scenario, but it indicates that Risks increased The probability of a recession is estimated at 40% in the neighboring country, so that the slowdown in the growth of the North American economy will have an impact on Mexico, according to the guidance Bloomberg Line.

He stressed that the rating agency sees resilience in the Mexican economy and Careful management of financial accountsfor this reason The final recession in the US will affect Mexicobut it is assumed that the macroeconomic policy response will be prudent and the country will benefit from Treaty between Mexico, the United States and Canada (T-MEC).

“With an appropriate (financial) response expected, it does not have to have an impact on the rating. The chance of T-MEC and near-delay is generally a good chance for the future although, perhaps more in the short term, it is an advantage”

Lisa Schneller, S&P Global

On Wednesday, July 6, 2022, the global rating agency S&P revised Mexico’s outlook to stable from negative due to the implementation of more cautious fiscal and monetary policies, and affirmed Mexico’s long-term foreign currency “BBB” sovereign credit rating and in the local currency. From “BBB +”.

The rating agency said in a statement that the stable outlook reflects expectations that cautious macroeconomic management will prevail over the next two years, despite the more complex global context.

Similarly, Standard & Poor’s expects the administration of President Andres Manuel Lopez Obrador to pursue economic policies that stabilize fiscal and debt dynamics.

The strength of the rating is the monetary environment in Mexico, Lisa Schineller said.since there is credibility for Banco de México (Banxico) which has a history of prudent and prudent politics.

Banxico’s response to the rate hike is important and is prudent. We assume that the bank will continue to pay for global and domestic conditions in a coercive manner to reduce inflation in the coming years.”

Lisa Schneller, S&P Global

Standard & Poor’s reported that on July 6, 2022, it also revised the outlook of Petróleos Mexicanos (Pemex) to stable from negative after a similar action on the sovereign.

In addition, the agency confirmed the global “BBB” foreign currency ratings and “BBB +” local currency ratings of the oil company.

S&P assumes there is an almost certain possibility of extraordinary support from the Mexican government for Pemex if the company presents a financial difficulty scenario, even though the sovereign state does not guarantee the company’s debts.

“Our Pemex rating actually mirrors the sovereign rating because we assume the government will provide some exceptional support to Pemex if necessary and that is why Pemex’s rating is the same as the sovereign rating. That view has been the same since the 1990s when we started evaluating Pemex and with this government has There will be more support for firefighting operations.”

Lisa Schneller, S&P Global

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