LatinNews Daily - 21 May 2026

*The international credit ratings agency Moody’s has downgraded Mexico’s local and foreign currency ratings from Baa2 to Baa3 – its lowest investment grade rating. However, it also revised Mexico’s outlook from ‘negative’ to ‘stable’. Moody’s said that the downgrade “reflects a sustained weakening in fiscal strength that accelerated in 2024 and that we expect to persist, as rigid spending, a narrow revenue base, and continued support to [state oil company] Petróleos Mexicanos (PEMEX) limit the government’s ability to stabilize debt in a low-growth environment”. It added that “despite efforts to reduce the fiscal deficit, other policy priorities, including energy sovereignty and a redistributive spending model, have weakened fiscal policy anchors and policy effectiveness, and contributed to wider deficits and faster deterioration in debt metrics than previously expected”. While noting that the government’s investment-related initiatives could support a gradual economic improvement in the medium-term, Moody’s warned that “economic growth is constrained by structural weaknesses, including high informality, insecurity and infrastructure bottlenecks related to energy and water availability”. However, Moody’s also said that the revision to a ‘stable’ outlook “reflects our expectation that further weakening in fiscal strength will be gradual and partly offset by Mexico’s macroeconomic stability, policy responsiveness, and underlying economic strength”.

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