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Moody’s says next administration will not weaken Mexico’s economy

Mexico City, Mexico — Moody’s Analytics says that regardless of the next president, Mexico’s economy is strong and will endure.

The rating agency changed its outlook for Mexico from negative to stable saying the next administration change will not affect the country’s economy. They say there is a low likelihood that the next political administration will weaken economic and fiscal trends.

In a statement, Moody’s changed its outlook for Mexico from negative to stable, and placed the country in the A3 rating, which refers to the ability to pay short-term debt obligations.

For the rating agency, a negative outlook means that the country is at risk of being downgraded, while a stable outlook is out of risk.

They report that the risks to economic growth has been reduced by the renegotiation of NAFTA, since negotiation commitments among the three NAFTA countries has remained stable.

According to the rating agency, the structural reforms adopted since 2013 have strengthened the country’s economy, which has brought positive results for Mexico and the indebtedness of the public sector.

In July 2017, Standard & Poor’s also revised the outlook for Mexico’s sovereign rating from negative to stable arguing that the country was responding adequately to external pressures and financial volatility. Fitch has also analyzed Mexico’s criteria and arrived at the same conclusion.

Miguel Messmacher, Undersecretary of Finance and Public Credit, says it is a faithful reflection of the good management of public finances and the soundness of the Mexican economy.

“The three rating agencies, Moody’s, Standard & Poor’s and Fitch are highlighting the work that was done during the past year from the point of view of public finances, reducing the deficit and debt, as well as the implementation of structural reforms, which in turn have improved the prospects for long-term growth,” he told Bloomberg.

He agrees that regardless of who wins the presidential seat, there are constitutional elements such as the autonomy of the central bank, the Federal Budget and Fiscal Responsibility Law and the reforms, which in some way shield and provide certainty to any radical change that a new administration could implement.