RTTNews - Wednesday, Moody's Investors Service affirmed Mexico's Baa1 foreign and local currency government bond ratings with a stable outlook. The decision was based on the country's economic policy framework that remained supportive of continued fiscal discipline, a demonstrated ability to access capital markets and a robust government debt profile, the firm said.
However, the strengths are partly offset by a weak potential growth and the government's narrow revenue base.
On a global basis, Mexico's credit ratings appropriately reflect the country's standing in terms of economic resiliency and financial robustness relative to similarly rated sovereigns, Mauro Leos, Moody's Regional Credit Officer for Latin America and lead analyst for Mexico said.
Moody's said that at present the corrective fiscal actions were sufficient to prevent a significant deterioration in the government accounts during 2009 and 2010. However, the firm indicated that the the mostly likely scenario was that the measures taken would be only stop-gap and would not address fundamental revenue constraints.
Meanwhile, the firm said the growth prospects would have a strong influence on Mexico's credit outlook.
Medium-term growth prospects are challenging given trend growth of some 3% during the last decade and questions about potential growth in the U.S. after the recent crisis, Moody's added.
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