Mexico receives ratification of the rating for its sovereign debt

This is an automated translation of the press release issued in Spanish

• The Fitch agency ratified the rating for Mexico's long-term sovereign debt at BBB-, above investment grade.

• The rating agency highlighted the prudence of macroeconomic policies, stability in external accounts and public debt in relation to GDP below that of peer economies.

• With this announcement, seven agencies have ratified Mexico's credit rating for the year, maintaining a stable outlook for the country.

Today, the rating agency Fitch maintained the rating of Mexico's long-term debt in foreign currency at BBB-, above investment grade. Likewise, it confirmed the stable outlook, indicating that it does not expect any changes in the rating during the next 12 to 18 months.

Fitch recognized a prudent, consistent and credible macroeconomic policy framework in Mexico. External finances remain robust with the capacity to absorb external shocks. The agency highlighted the authorities' commitment to ensuring the stability of fiscal and monetary policy in order to contain macroeconomic imbalances.

The agency highlighted that public debt relative to GDP will remain below the median of peer countries with a BBB rating. The increase in the fiscal deficit estimated for 2024 is in line with what was proposed by the Ministry of Finance and towards 2025, although the agency foresees a greater expenditure exercise than expected, it clarifies that it will be until the delivery of the 2025 Economic Package, where The fiscal results can be observed in greater detail.

Fitch recognized the Federal Government's continued support for Pemex and highlighted the budget line included in the 2024 economic package as a reflection of transparency and commitment on the part of the Government. Although challenges persist for the company, these support measures will be sufficient to cover its debt commitments acquired for the current year.

The rating agency estimated a moderation in the growth rate associated with the restrictive financial conditions prevailing in the market and lower external demand. However, this will be offset by the strength of domestic demand, a low unemployment rate and the process of relocation of companies that will increase investment and diversify manufacturing capacity.

This ratification of the sovereign debt will allow continued favorable access to national and international markets. The Ministry of Finance and Public Credit maintains its commitment to maintaining stability in public finances and debt.

The full report can be found in the following link: https://www.fitchratings.com/research/sovereigns/fitch-affirms-mexico-at-bbb outlook-stable-18-07-2024

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