The rating agency Moody’s said on Monday that the course of Mexico’s macroeconomic and fiscal policy is unlikely to change after the result of the recent midterm elections, in which the ruling party and its allies lost ground in the Chamber of Deputies.
“In our opinion, the proposed changes in the economic team and the results of the midterm elections do not result in a material change in the direction of macroeconomic and fiscal policies,” Moody’s said in a statement.
The results of the vote were preceded by announcements from President Andrés Manuel López Obrador about, which would not change the current course, either, Moody’s noted.
Morena and his allies reduced seats in the Chamber of Deputies but maintained a majority of half plus one vote, which will still allow him to achieve key government goals, such as greater support for state oil company Pemex and passing the 2022 budget.
However, the rating agency, which maintains Mexico’s sovereign rating at a “Baa1” level with a negative outlook, highlighted that the loss of control by two-thirds of the lower house reduced the risk of radical constitutional changes, especially in the energy sector. .
In fiscal matters, Moody’s said, the appointment of Rogelio Ramírez de la O as the next Secretary of the Treasury favors continuity. “We hope that the fiscal austerity stance that has characterized the administration will continue,” the rating agency said.
The economist, a long-time advisor to López Obrador, will replace Arturo Herrera in the Finance Ministry, who was nominated by the president to relieve the current governor of the Mexican central bank at the end of the year. The appointment will have to be ratified by the Senate.
“Even with Herrera as governor, we expect the central bank to maintain its independence, an important factor supporting the credibility and effectiveness of monetary policy,” Moody’s said.
With information from Reuters and EFE
