Standard & Poor's maintains Mexico's sovereign rating at "BBB" with a stable outlook

The international rating agency Standard and Poor's (S&P) announced that it is maintaining Mexico's sovereign rating at "BBB" for foreign-currency debt, along with a stable outlook . This decision, announced Monday, confirms that the Mexican economy maintains its investment-grade status, meaning international investors perceive a minimal risk of default on the country's financial obligations.

The news generates confidence in the markets, as a downgrade would have implied higher financing costs for the government and a potential negative impact on foreign direct investment. On the contrary, maintaining the rating reflects recognition of the prudent management of fiscal and monetary policies by the Mexican economic authorities.

According to Standard and Poor's, the decision to maintain the rating at "BBB" is primarily due to three factors:

1. Responsible fiscal policy: Mexico has maintained a moderate fiscal deficit , limiting the need for excessive borrowing.
2. Stable monetary management: The Bank of Mexico has maintained price stability through cautious monetary policy decisions, strengthening confidence in the national currency.
3. Political and commercial pragmatism: S&P indicated that it expects the Mexican government to handle its disputes with the United States on issues such as trade and immigration, two key factors for the national economy, pragmatically.

The combination of these factors contributes to investors continuing to consider Mexico a reliable country for investing capital, both in public debt and in long-term investment projects.

In its analysis, Standard and Poor's also referred to the role of President Claudia Sheinbaum and the expectation that her administration will continue to responsibly manage public finances. The relationship with the United States will be a key element, given that both countries are bound by the United States-Mexico-Canada Agreement (USMCA) , which influences strategic sectors such as the automotive industry, energy, and agriculture.

The rating agency anticipates that, although tensions may arise in the bilateral relationship, they will be managed pragmatically to avoid negative impacts on economic stability . The continued trust of international organizations will depend largely on this negotiating capacity and maintaining clear rules for private investment.

In addition to its foreign-currency debt, Standard & Poor's maintained its local-currency debt rating at "BBB+" with a stable outlook. This is important because much of the Mexican government's financing is in pesos, which reduces vulnerability to sudden movements in international markets.

A stable investment grade in local currency strengthens the country's position with institutional investors, such as pension funds or insurance companies, who tend to be more conservative in their investment decisions. In this way, Mexico ensures a solid foundation to cover its domestic financing needs without excessive dependence on external debt.

Maintaining the rating has direct implications for several sectors:

• For the government: it allows access to international financing at lower interest rates, which translates into a lower cost of debt.
• For foreign investors, it represents a sign of confidence in the Mexican economy, encouraging the arrival of capital and new projects.
• For citizens: Although not immediately noticeable, a stable rating helps maintain a more stable economic environment, which can be reflected in lower inflationary pressures and a favorable climate for job creation.

Despite the current stability, Standard & Poor's warned that certain factors could put pressure on the rating in future reviews. These include:

• A considerable increase in the fiscal deficit .
• Policies that compromise the autonomy of the Bank of Mexico .
• Prolonged tensions with the United States affecting bilateral trade.
• Economic growth below expectations in the medium term.

The challenge for the country will be to maintain a balance between domestic social demands and the fiscal discipline necessary to maintain market confidence.

Standard & Poor's decision to maintain Mexico's sovereign rating at "BBB" with a stable outlook is a positive sign in a global context marked by economic uncertainty. Recognition of prudent fiscal management, responsible monetary policy, and the prospect of pragmatic relations with the United States reinforce investor confidence.

However, the country is not without risks, and it will be crucial for Claudia Sheinbaum's administration to maintain economic stability as a priority. As long as Mexico manages to balance domestic pressures with a challenging international environment, it will be able to maintain its investment-grade status, thus ensuring a solid foundation for future growth.