Moody's Downgrades Mexico's Sovereign Debt Rating to 'Baa3'

Moody's Investors Service downgraded Mexico's sovereign debt rating by one notch to 'Baa3'.

The agency also adjusted the country's outlook to 'stable' from 'negative'. This decision reflects an expected persistent weakening in Mexico's fiscal strength.

Government spending, a narrow revenue base, and continued financial support for state-owned petroleum company Pemex drove the downgrade.

These policy priorities have weakened the fiscal outlook and increased Mexico's vulnerability to shocks. Moody's expects subdued near-term economic growth.