LatinNews Daily - 17 April 2025

*The international credit ratings agency Fitch has maintained Mexico’s long-term foreign currency issuer default rating at ‘BBB-’ with a stable outlook. Fitch highlighted various challenges for the Mexican economy, but noted that the decision to maintain the outlook as stable “reflects Fitch’s view that Mexico’s rating has headroom to withstand the tougher economic environment implicit in our new baseline”. It states that “an economic slowdown already underway is likely to worsen amid an aggressive turn toward trade protectionism in the US”, leading to a period of “muted growth”, given that exports to the US accounted for 27% of GDP in 2024. Fitch expects a 0.4% GDP contraction in Mexico this year, down from 1.5% growth in 2024, before a “modest” 0.8% recovery in 2026. Meanwhile, it states that the fiscal position of President Claudia Sheinbaum’s government has been weakened by high social outlays, public megaprojects, higher interest costs, and operational losses at state oil company Pemex. However, Fitch expects the government to meet its fiscal targets for this year, helped by a 10% year-on-year increase in tax revenue in the first two months of 2025.

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