S&P expects cautious economic policies in Mexico and possible US trade challenges

S&P Global Ratings stated on Tuesday that it expects Mexico will continue to maintain a cautious macroeconomic policy over the next two years. It also warned of possible challenges for Latin America's largest economy including trade with the United States.

Joydeep Mukherji, Managing Director of Sovereign Ratings, stated that the trade relationship between Mexico & the United States is at risk due to potential new tariffs under Donald Trump's presidency and a revision in 2026 of the North American USMCA Free Trade Pact.

Mukherji said that the agency may lower Mexico's current "BBB rating" if fiscal deficits and government debt worsen. It also noted that it closely monitored Pemex, a state-owned oil and energy company, and CFE, which receives extraordinary financial support.

He said that a deteriorating investor's sentiment and a decrease in investment could also be threatening to the rating.

Mukherji said that, on the other hand, an effective economic and political management under the new administration of President Claudia Sheinbaum could lead to a positive review of Mexico's credit rating. (Reporting and writing by Sarah Morland, Raul Cortes Fernandez, Anthony Esposito. Editing by Brendan O'Boyle.

(source: Reuters)