The ambitious financial reforms taking place in Mexico have prompted Moody’s to elevate the nation’s credit rating to A3 last week,putting Latin America’s second largest economy in its top tier of lending nations. The upgrade comes at a time when many other emerging markets are struggling,proving that Mexico’s economy is poised for additional growth and stability in 2014.
“Moody’s said it expects the economic reforms approved in Mexico last year ‘will strengthen the country’s potential growth prospects and fiscal fundamentals’,” writes Reuters.
Since President Enrique Pena Nieto took office in late 2012,Mexico’s Congress has approved a slew of progressive reforms related to the nation’s banking,education,telecom,tax and energy sectors. This latest upgrade comes after Standard & Poor’s raised its sovereign long-term foreign currency credit rating for Mexico to BBB-plus last December.
“The approval of reforms not only reflects strong political will and ability to deliver campaign promises,but in some instances also exceeds initial expectations,” stated Moody’s.
The upgrade prompted Mexico’s peso and leading share index to take a positive turn,which will lower the nation’s borrowing costs and provide another boost to the already expanding economy. Ratings agencies Standard & Poor’s and Fitch are also expected to upgrade Mexico in the near future as the sweeping reforms continue to boost competition and growth – especially in the telecom and energy sectors.
“Confidence in Mexico is growing,” stated Pena Nieto in a press conference following the upgrade announcement.
In another clear sign that right now truly is ”Mexico’s Moment” on the world stage,U.S. Secretary of Commerce Penny Pritzker met with government leaders on a five-day trip to Mexico,where she discussed trade,investment and the growing bilateral commercial relationship between the two countries. The talks are expected to give U.S. companies a chance to develop new routes for expansion into the Mexican market,especially in key industries such as IT and medical devices,advanced manufacturing and communications technology.