Mexico’s Investment Grade Status Confirmed by Fitch

Fitch Ratings has affirmed Mexico’s Long-Term (LT) Foreign Currency (FC) Issuer Default Rating (IDR) at ‘BBB-‘ with a stable outlook. This means that Mexico’s credit rating remains in the investment grade category. Fitch’s rating is supported by the country’s “diversified economy, sound macroeconomic policies, and moderate external indebtedness”. The affirmation of Mexico’s credit rating is good news for the country as it indicates that it is a relatively safe investment destination for foreign investors.

Fitch Ratings considers several factors when rating a country’s creditworthiness. According to their website, each specific rating report will discuss the factors most relevant to the individual rating.

However, the following factors are generally considered:
Standalone Credit Profile: This refers to the country’s ability to repay its debt based on its economic and financial strength. Fitch considers factors such as the country’s GDP growth, inflation, fiscal policy, external liquidity, and debt sustainability.
Support: This refers to the likelihood of external support from other countries or international organizations in case of financial distress. Fitch considers factors such as the country’s political stability, institutional framework, and relationships with other countries.
Industry-specific factors: For certain industries such as banks and corporations, Fitch has specific criteria that consider factors such as the company’s market position, financial performance, and management quality.

In the case of Mexico, Fitch’s rating is supported by the country’s diversified economy, sound macroeconomic policies, and moderate external indebtedness