International Rating Agencies Act in Favour of the Financial Sector & Against Mexico’s National Interest

ByArturo Huerta González

This article by Arturo Huerta González originally appeared in the February 24, 2026 issue of La Jornada de Oriente, the Puebla edition of La Jornada, Mexico’s premier left wing daily newspaper.

On February 17, 2026, the Mexican Institute of Finance Executives (IMEF) indicated that with a public deficit of 4.3% of GDP in 2025, Mexico risks having its investment grade rating downgraded by rating agencies. The IMEF recommended reducing the deficit to 3.5% to avoid a downgrade. The IMEF urged the government to reduce spending and investment in a context of declining private sector consumption and investment, coupled with a trade deficit. They argued that this recommendation would further hinder economic growth.

On February 18, Fitch Ratings stated that public debt would reach 54.5% by 2025 , due to the absorption of Pemex ‘s debt and the weak state of the economy. They warned that if Mexico does not stabilize its debt, its sovereign rating will be negatively impacted. Rating agencies and conventional economists fail to analyze the root causes of the fiscal deficit and the increase in debt, and their recommendations often lead to even larger deficits and higher debt. It should be noted that the budget cuts recommended by rating agencies to reduce the deficit and debt are what contract economic activity and increase unemployment. As a result, the government collects less revenue and must increase social and public security spending to counteract the problems stemming from unemployment and poverty, putting pressure on public finances and the debt. Added to this is the cost of servicing the debt , due to the high interest rates set by the Bank of Mexico (BANXICO). The deficit is not due to increased public spending and investment, hence the slowdown in economic activity , which has led to a vicious cycle that results in a larger deficit and greater debt.

The rating agency’s assessment that the economy is in a weak position, compromising credit risk, should be noted. This weakness stems from the budget cuts recommended by the rating agencies to reduce the deficit and public debt, which in turn reduces the fiscal policy space available to address external shocks. This demonstrates the failure of the policies recommended by the rating agencies to adjust public finances.

Fiscal policy should not cater to the financial sector and big capital, which has led to stagnation and intensified privatization and foreign ownership of the economy, greater wealth inequality , and dependence on capital inflows, as economic policy prioritizes promoting them at the expense of economic growth and job creation.

Fitch Ratings advocates for tax reform to consolidate public finances and commented that Mexico could avoid recession by achieving a favorable renegotiation of the USMCA trade agreement and attracting investment through nearshoring, “or it will be trapped in even slower growth for a longer period.” Regarding tax reform, it should be noted that raising taxes in a context of stagnation is inappropriate, as this would further reduce consumption, investment, economic activity, and tax revenue, thus perpetuating the fiscal deficit and increasing debt. Fitch ‘s assertion that a successful renegotiation of the USMCA and nearshoring investments would prevent recession in Mexico demonstrates that the national economy lacks the endogenous conditions to resume growth, instead depending on the behavior of external variables. These variables have been present for years and have not driven the country’s economic growth; rather, they have benefited transnational corporations.

By questioning the fiscal deficit and public debt, rating agencies and conservatives aim to limit government intervention in the economy , forcing it to restrict spending and investment so that the business elite invests where the government stops doing so, thus making the economy dependent on the investment decisions of the private sector , which imposes economic policy in its favor, relegating the welfare objectives for the whole of society.

Credit rating agencies are concerned about the repayment of external debt, because they operate in favour of international creditors. Eighty-five percent of the Mexican government’s debt is in local currency, which it has no problem managing, as it is being restructured. To prevent this debt from putting pressure on public finances, interest rates should be kept low. The government is the only entity that can counteract the decline in private investment stemming from uncertainty surrounding the renegotiation of the USMCA and the lack of growth prospects. The government must spend more than it collects in revenue to support domestic production and employment, thereby increasing demand and private investment, substituting imports, and reducing the foreign trade deficit. This would increase national income and tax revenue, reduce the fiscal deficit and the amount of debt, and avoid creating pressure on prices and the exchange rate.

Increased public spending and debt in local currency would not cause problems with debt repayment. The government can meet its financial obligations and does not need to restrict spending and investment to do so. It needs to spend to stimulate economic activity, to improve the income of both the private and public sectors, so that both can meet their financial obligations and continue investing and creating jobs. The problem is that international rating agencies and conservative economists favor reducing the public deficit to stifle the economy, generate unemployment, and keep wages low, thus benefiting capital.

We must disregard the recommendations of rating agencies and neoliberals that we must reduce the fiscal deficit and the amount of debt to avoid a lower credit rating. Fiscal policy should not cater to the financial sector and big capital, which has led to stagnation and intensified privatization and foreign ownership of the economy, greater wealth inequality , and dependence on capital inflows, as economic policy prioritizes promoting them at the expense of economic growth and job creation. Instead of responding to the dictates of international rating agencies that favor the financial sector, fiscal policy should prioritize job creation and productive development to reduce the foreign trade deficit and our dependence on capital inflows.