Moody's downgrades Mexican government's outlook to 'negative' over weakening of judiciary and debt
Mexico's president has lashed out at Moody’s ratings service after it downgraded the Mexican government’s debt outlook to “negative.”
MEXICO CITY — Mexico’s president lashed out Friday at Moody’s ratings service, after it downgraded the Mexican government’s debt outlook to “negative.”
Moody’s said it had downgraded the government's debt outlook from “stable” to “negative” because newly approved laws in Mexico could weaken the judiciary branch and checks and balances. It reaffirmed Mexico’s Baa2 overall credit rating, but said increased government debt represented a risk for Mexico.
It also mentioned the possibility that the government will have to transfer more money to shore up the highly indebted state-owned oil company, Pemex.
President Claudia Sheinbaum said that ratings agencies often have a “bias of origin” against the economic policies her party adopted under former President Andrés Manuel López Obrador, who took office on Dec. 1, 2018.
“Many times these ratings agencies are aimed at issuing evaluations starting from an economic model,” Sheinbaum said. “Starting in 2018, the economic model in our country changed. Many times these ratings have this bias of origin.”
Under López Obrador, who was Sheinbaum's political mentor, the government began transferring large amounts of money to the state-run oil company, started large building projects and implemented cash handout programs. That led to federal budget deficits of about 6% of Mexico's gross domestic product in 2024, which are expected to continue, albeit at somewhat lower levels, in 2025.
And Sheinbaum continued López Obrador's push to implement changes to the judiciary that will make all federal judges stand for election in 2025 and 2026. The United States
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