Moody’s warns growing debt weighs on Mexico’s rating

2/6/2017 Reuters

credit cards and coinsMoody’s rating agency, which has put Mexico on watch for a credit downgrade, on Monday said the Mexican government’s debt rose more than expected last year and weak growth could further pressure policymakers this year.

“Worse-than-expected fiscal performance is credit negative for Mexico and weighs on its creditworthiness amid muted economic activity and rising tensions with the United States, its main trade partner, following the U.S. presidential election,” Moody’s Mexico analyst Jaime Reusche wrote in a research note.

The report cited data from the country’s Ministry of Finance, showing the federal government deficit increasing to 2.9 percent of GDP in 2016, up from 2.8 percent in 2015.

The ratings service had expected fiscal consolidation and a deficit reduction to 2.5 percent of GDP for 2016, it said.

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