“What you would expect from us is a change in outlook, either from stable to positive or stable to negative, most likely the latter,” he said.
Fitch Ratings maintains a BBB- rating, with a stable outlook, the lowest of all rating agencies, as it is one step away from “non-investment”.
But the agency notes that external finances are solid, in addition to the credibility of the Bank of Mexico. It also does not rule out some negative impact from the approval of the judicial reform, however, it is too early to measure it.
“The reform that is most worrying and causing the most noise is that of the Judiciary. We clearly see that this will have a negative impact on the institutional profile of the country, especially on the vulnerability and autonomy of the Judiciary,” Carrillo said.
Carrillo noted that the next president, Claudia Sheinbaum, will be entrusted with a stable economy and a cautious monetary and fiscal policy is anticipated to contain macroeconomic imbalances.
The eye on investments
For his part, Omar De la Torre, an analyst at Standard & Poor’s (S&P) Global Ratings, said that the agency does not have a preference on whether judges should be chosen.
But it will also be watching closely to see whether Mexico’s judicial reform affects investments or fiscal accounts, which could have a negative impact on Mexico’s credit rating, according to a Bloomberg report.
S&P has a BBB rating for Mexico, with a stable outlook, which it has maintained since March 2020.
De la Torre said failure to reduce the deficit and the rise in the debt-to-gross domestic product ratio above 50% could lead to negative credit action, but he expects the new government to maintain macroeconomic prudence.
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