S&P Global Ratings announced an adjustment to its view of Mexico's sovereign credit trajectory, revising the outlook on the country's long-term ratings to negative from stable. At the same time, the agency reaffirmed Mexico's BBB rating on foreign-currency debt and its BBB+ rating on local-currency debt, and it kept the A-2 short-term ratings unchanged.
The ratings body said the change in outlook reflects the prospect of very slow fiscal consolidation, a condition S&P connects largely to low economic growth. That sluggish expansion, the agency warned, increases the risk of a faster-than-anticipated accumulation of government debt and a heavier interest burden on public finances.
S&P highlighted ongoing and sizeable fiscal support for Petroleos Mexicanos (Pemex) and the Comision Federal de Electricidad (CFE) as a factor likely to exacerbate Mexico's fiscal rigidities. The agency cited recent deficit figures to underline its assessment: Mexico's general government deficit was 4.9% of GDP in 2025, down from 5.2% of GDP in 2024, while S&P projects a deficit of 4.8% of GDP for 2026.
Looking ahead, S&P said it could lower Mexico's sovereign ratings within the next 24 months if the government does not reduce fiscal deficits sufficiently and in a timely way to stabilize and contain government debt levels, interest expenses and contingent liabilities. The agency also flagged another trigger for a downgrade: unforeseen setbacks in trade and other economic ties with the United States that would weaken Mexico's external position and undermine economic stability.
On the growth side, S&P pointed to a marked slowdown in activity. GDP growth fell to 0.8% in 2025 from 1.1% in 2024 and 3.3% in 2023. The economy expanded by 0.2% in annual terms in the first quarter of 2026. For the full year 2026, S&P expects GDP to grow by 1%, citing a challenging external environment that includes a surge in energy prices and lingering uncertainty over the renegotiation of the United States-Mexico-Canada Agreement (USMCA).
Fiscal projections in the S&P assessment show net general government debt rising to roughly 54% of GDP by 2029, up from 49% in 2025. The agency expects net debt to increase by an average of 4.4% of GDP per year over 2026-2029. Meanwhile, interest payments as a share of general government revenue are forecast to average marginally above 15% during the period covered by the agency's outlook.
This report focuses on the rating action, S&P's rationale and the agency's forecasts; it does not introduce additional data beyond the ratings agency's published assessment.