DBRS changes Mexico trend to negative

DBRS said it confirmed Mexico’s long-term foreign and local currency issuer ratings at BBB (high) and changed the trend to negative from stable.

The negative trend reflects DBRS’ view that Mexico’s medium-term growth outlook has weakened, due largely to policy action by the López Obrador administration. DBRS considers poorly-targeted infrastructure spending, reduced reliance on private capital and less predictable policymaking could end up constraining investment and dampening productivity growth over time.

While the government is committed to sustainable public finances, the reorientation of policy, especially in the energy sector, could leave the government with fewer resources to address its core objectives of reducing poverty and improving economic opportunity, DBRS said.

The BBB (high) ratings balance Mexico’s long track record of sound macroeconomic policymaking with the country’s deep governance and growth challenges.

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