S&P's Warning Shot: Mexico's Fiscal Drift and Low Growth

S&P has revised Mexico's outlook to negative due to fiscal drift and low growth, placing the country at risk of a bond market 'forced-selling' event.

Key Takeaways

• 1.S&P Global Ratings shifted Mexico's sovereign credit outlook to negative, signaling a potential downgrade to junk status within 1-2 years.
• 2.Mexico's fiscal position is deteriorating, with the government deficit projected at 4.8% of GDP in 2026 and net debt expected to reach 54% of GDP by 2029.
• 3.The country is one downgrade away from a forced-selling event in bond markets, as two out of three major agencies now have negative outlooks.

Table of Contents

• S&P's Warning Shot: Mexico's fiscal drift and low growth draw a Negative Outlook
• Mexico: Gross public debt (% GDP)
• Mexico: Monetary Policy path and forecasts
• Disclaimer

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