World Economy

Mexico’s Outlook Cut to Negative

Mexico’s Outlook Cut to NegativeMexico’s Outlook Cut to Negative

Moody’s cut its outlook for Mexico’s credit rating on Thursday to negative from stable due to the country’s low economic growth, dicey external environment, and a chance the government may pour more funds into propping up state-owned oil firm Pemex, Reuters reported. The credit rating agency maintained Mexico’s sovereign rating at A3, but said Latin America’s second-largest economy faces challenges in trying to consolidate its finances and stabilize debt levels. A senior finance ministry official said Mexico disagreed with the move. In a news conference, Moody’s said it would wait a year or two before deciding whether to lower Mexico’s sovereign rating. Moody’s still rates Mexico higher than rival ratings agencies, S&P and Fitch. Moody’s said that new government obligations “in the form of possible government support to Pemex, given liquidity pressures at the state-owned oil producer, could further undermine the fiscal consolidation process.” Moody’s also downgraded its rating for Pemex on Thursday to Baa3, from Baa1.