Pressure over Mexico’s sovereign ratings increased on Monday as Standard & Poor’s signaled a possible downgrade later this year and a Moody’s analyst said his agency could also act soon if the country is unable to contain growing fiscal problems.
S&P revised to negative from stable the outlook on Mexico’s BBB-plus sovereign credit ratings. The agency warned it may downgrade them this year if the government fails to reduce its heavy reliance on oil revenues, which have been declining fast as a result of a global recession.
In an interview with Reuters, S&P analyst Lisa Schineller said the Mexican administration has signaled its intent to add some “fiscal enhancing measures” to the country’s 2010 budget.
“But it is not clear how deep those measures will be, how permanent they will be and also not clear how the political appetite will be” for approving the measures, she said.