Mexico's Macroeconomic Forecast: Stability Amid Global Trade Tensions

S&P Global Ratings anticipates cautious macroeconomic management for Mexico over the next two years, amid potential trade challenges with the United States. The agency warns of risks from new tariffs and revisions to the USMCA pact. Effective domestic governance could influence Mexico's credit rating positively.

S&P Global Ratings has predicted a continued cautious approach to macroeconomic management in Mexico over the next two years, despite looming trade challenges with the United States. The relationship between these two major trade partners faces uncertainties including possible new tariffs and an upcoming revision of the USMCA agreement, S&P's sovereign ratings managing director, Joydeep Mukherji, highlighted.

During the Mexico 2025 credit outlook presentation, Mukherji acknowledged that while renegotiation of USMCA is possible under President-elect Donald Trump, a strong lobby in the U.S. could resist such changes. He indicated that Mexico would likely maintain access to the U.S. market, although with slightly altered rules, especially concerning Chinese manufacturers using Mexico as an export base.

S&P warned of a potential downgrade in Mexico's current 'BBB' rating if there is an increase in government debt and fiscal deficits. Conversely, strong political and economic governance under President Claudia Sheinbaum might enhance the nation's credit standing. Although consumption appears to be trending upward, S&P remains prudent about future judicial reforms affecting Mexico's credit profile.

(With inputs from agencies.)