S&P Global Ratings Puts Mexico’s Credit Outlook on Negative Amid Slowing Growth and Rising Debt

On May 12, S&P Global Ratings changed Mexico’s sovereign credit outlook from “stable” to “negative,” keeping the long-term foreign-currency rating at “BBB” and the local-currency rating at “BBB+.” The agency warned that very slow fiscal consolidation could speed debt buildup and raise the interest burden.

S&P Revises Mexico's Outlook to NegativeS&P Lowers Mexico Outlook, Warns of Downgrade RiskReuters

S&P cited weak growth, low per-capita expansion and soft activity as core constraints on fiscal consolidation. Rigid spending and the weak finances of state-owned Pemex and CFE intensify fiscal strain. The assessment involves S&P, the Mexican government and USMCA renegotiations; Moody’s, Fitch and DBRS provide comparative ratings.

Reuters

• General-government deficit: 4.9 % of GDP in 2025, 5.2 % in 2024, projected 4.8 % in 2026.

S&P Global Revises Mexico Credit Outlook to Negative Amid Rising Debt Concerns

• Net debt: 49 % of GDP in 2025, forecast to rise to about 54 % by 2029, with interest payments expected to exceed 15 % of revenue.

S&P Global Revises Mexico Credit Outlook to Negative Amid Rising Debt Concerns

• Growth: 0.8 % in 2025, 0.2 % in Q1 2026; S&P projects 1 % expansion in 2026.

S&P Global Revises Mexico Credit Outlook to Negative Amid Rising Debt Concerns

S&P said the negative outlook reflects the risk of “very slow fiscal consolidation” driven by weak growth and rising debt. Moody’s maintains a negative outlook (Baa2). Fitch rates Mexico one notch above speculative grade with a stable outlook; DBRS keeps a “BBB” rating.

S&P Revises Mexico's Outlook to NegativeS&P Lowers Mexico Outlook, Warns of Downgrade RiskReuters

Banco Base analysts warned that a downgrade by two of the three rating agencies could trigger mandatory bond sell-offs, raising financing costs for borrowers. They call for a credible fiscal consolidation plan to preserve Mexico’s investment-grade status.

S&P Lowers Mexico Outlook, Warns of Downgrade Risk

Sources differ on the 2025 deficit (4.9 % vs. 5.2 % in 2024) and on the 2026 growth outlook (0.2 % Q1 versus a 1 % annual forecast). Details on the government’s fiscal plan are missing.

S&P Global Revises Mexico Credit Outlook to Negative Amid Rising Debt Concerns

• “May 12 (Reuters) - Credit ratings agency S&P on Tuesday revised Mexico's outlook to "negative" from "stable", citing the risk of very slow fiscal ?consolidation largely due to weak economic growth that could lead to a faster-than-expected buildup in government debt and a higher interest burden.” — S&P Global Ratings

Reuters

• “S&P said continued fiscal support for Mexican state energy producer Petroleos Mexicanos (Pemex) and power utility Comision Federal de Electricidad (CFE) is expected to further strain public finances.” — S&P Global Ratings

Reuters

• “The negative outlook signals a heightened risk that Mexico could face a sovereign downgrade within the next 24 months.” — S&P Global Ratings

S&P Lowers Mexico Outlook, Warns of Downgrade Risk

• “The move raises concerns over Mexico’s investment-grade status, as a potential downgrade could trigger institutional bond selloffs and significantly increase financing costs for both public and private borrowers.” — S&P Global Ratings

S&P Lowers Mexico Outlook, Warns of Downgrade Risk

The outlook change coincides with USMCA renegotiations, which could affect trade-related investment sentiment. S&P warns that failure to stabilize debt and cut deficits could trigger a sovereign downgrade within two years, prompting close monitoring of Mexico’s fiscal stance.

S&P Lowers Mexico Outlook, Warns of Downgrade Risk