Standard & Poor’s Global Ratings: Mexico.

RESEARCH UPDATE:

Mexico ‘BBB’ Foreign Currency And ‘BBB+’ Local Currency Long-Term Ratings Affirmed; Outlook Remains Negative

Overview

• Mexico is poised to close 2021 with a 5.8% rebound in GDP, which leaves a still sizable output
  gap coming out of the pandemic-induced recession in an economy that has had a track record
  of subpar GDP growth.
• As President López Obrador heads into the second half of his six-year term, we assume
  continuation of cautious macroeconomic management that has limited the rise in debt and
  deficits, with net general government debt holding steady at about 46% of GDP over the next
  three years.
• We affirmed our ‘BBB’ long-term foreign currency and ‘BBB+’ long-term local currency
  sovereign credit ratings on Mexico.
• The outlook remains negative, indicating the risk of a downgrade over the coming year due to
  more pronounced and lasting contingent liabilities associated with managing complex fiscal
  challenges at Petróleos Mexicanos (PEMEX) and Comision Federal de Electricidad (CFE), or
  from uncertainties in the business climate that would keep growth subdued.