Overview and Key Figures
Economists from Fitch Ratings have revised their GDP growth forecast for Mexico to 0.4% for this year, up from their previous expectation of a -0.1% contraction in June. Despite this positive adjustment, Fitch has cautioned that Mexico’s weak economic growth poses challenges to fiscal consolidation.
Sectoral Analysis and Future Projections
In a non-rating-impacting sectoral analysis, Fitch estimates that Mexico’s economy will accelerate to achieve a 1.2% growth rate next year, still below the 1.4% GDP growth recorded in 2024 and far from the 2.5% average pre-pandemic growth rate.
- Sectoral analysis does not affect Fitch’s credit ratings
- Next year’s growth projection: 1.2%
- 2024 GDP growth: 1.4%
- Pre-pandemic average GDP growth: 2.5%
Internal Reforms and Corporate Emission Risks
Fitch analysts mentioned that internal reforms in Mexico, such as the modification to the Ley de Amparo, contribute to an uncertain environment for corporate issuers.
This specific reform deepens the risk landscape for corporate issuers already facing low demand, as it “could leave debt-issuing corporations vulnerable in case of friction with authorities and expose them to less reliable protection.”
Government Support for Pemex and its Impact
Regarding Mexico’s financial support for the state-owned oil company, Pemex, Fitch stated that it has a neutral impact on the government’s solvency but reflects its commitment to supporting Pemex.
US Tariffs: A Crucial Factor for 2026
Fitch emphasized that US tariffs are a key component in their outlook for emerging market growth.
“Despite some emerging markets showing unexpected resilience to tariffs and improved financial conditions maintaining issuer solvency in emerging markets, significant risks persist such as US tariffs, pressure on public finances, and political uncertainty.”
Key Factors to Consider
Fitch identified several crucial factors, including:
- Aversion to risk signals among emerging markets or potential financial shocks from developed markets
- Economic uncertainty and social discontent policies, along with their impact on growth
- Structural reforms and fiscal results
Mexico’s Credit Rating and Outlook
Fitch confirmed Mexico’s sovereign rating at “BBB-/ Stable Outlook” in April, acknowledging prudent macroeconomic policy, robust external finances, and the economy’s diversification.
This confirmation places Mexico’s credit rating at the lowest investment-grade level, with no risk of deterioration or downgrade within six to twelve months.
Key Questions and Answers
- Q: What is Fitch’s revised GDP growth forecast for Mexico in 2023? A: Fitch has revised its forecast to 0.4% for this year.
- Q: How does Fitch view Mexico’s economic growth prospects? A: Fitch acknowledges weak economic growth in Mexico, which poses challenges to fiscal consolidation.
- Q: What is Fitch’s growth projection for Mexico in the following year? A: Fitch estimates a 1.2% growth rate for Mexico in the next year.
- Q: How do internal reforms in Mexico affect corporate issuers? A: Internal reforms, like the Ley de Amparo modification, create an uncertain environment for corporate issuers facing low demand.
- Q: What is the impact of US tariffs on emerging markets’ growth according to Fitch? A: US tariffs are a significant risk factor for emerging markets’ growth, along with pressure on public finances and political uncertainty.
- Q: What is Mexico’s current credit rating and outlook from Fitch? A: Mexico’s sovereign rating is “BBB-/ Stable Outlook” according to Fitch.
