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S&P Warns of Slow Growth, Rising Debt for Mexico
13 May
Summary
- S&P revised Mexico's credit outlook to negative due to slow fiscal consolidation.
- Weak economic growth and spending rigidity increase government debt burden.
- Fiscal support for state energy firms strains public finances.
Credit ratings agency S&P has revised Mexico's outlook to "negative" from "stable" as of May 12, 2026. This adjustment stems from concerns about very slow fiscal consolidation, largely driven by persistently weak economic growth.
Low per capita growth remains a key constraint for Mexico's ratings. Soft economic activity, inflexible spending patterns, and the weakened financial position of state-owned energy firms are collectively eroding fiscal flexibility and contributing to rising government debt levels.
S&P anticipates continued fiscal pressure due to ongoing support for Petroleos Mexicanos (Pemex) and Comision Federal de Electricidad (CFE). The agency projects the general government deficit to reach 4.8% of GDP by 2026.
Net general government debt is forecast to increase from 49% of GDP in 2025 to approximately 54% by 2029. Despite these concerns, S&P maintained Mexico's "BBB" long-term foreign currency and "BBB+" long-term local currency sovereign credit ratings.
