In another round of good news for Mexico's economy,Reuters reported last month that Moody's has announced that the country should not be negatively affected in any way by the current credit downgrade in the United States. In fact,Moody's stated that Mexico's economy is “well-placed to withstand shocks,” and its credit rating is expected to remain strong – good news for investors within Mexico and around the world.
Last month,Mexico's current investment-grade BAA1 sovereign rating was solidly confirmed by Moody's,which told Reuters that,“The negative outlook placed on the United States' AAA does not carry negative implications for Mexico's BAA1 rating or the [country's] stable outlook.” The news caused investors from around the world to breathe a sigh of collective relief and is expected to encourage additional foreign investment in Mexico.
Moody's recently gave the United States a negative outlook in early August after Standard & Poor's also downgraded the US global rating from AAA to an AA-plus. The continuous struggle in the US during recent years regarding its economic data and growing international dependence on debt has caused some analysts to worry about the effect the recent downgrades will have on Mexico's otherwise strong and growing economy,in part because of its strong trading relationship with the US.
“Given a credit resilience that is comparable to that of higher-rated sovereigns,Mexico is considered to be one of the countries better positioned to confront an adverse global macroeconomic environment within the BAA category,” said Moody's in the report. As a result of the global downturn and US downgrade,Mexico's central bank has reigned in growth expectations from a high of between 4 and 5 percent,down to a more conservative estimate of between 3.8 and 4.8 percent – still positive numbers considering the current uncertain global economic environment.