Fitch Downgrades Mexico to 'BBB-'; Outlook Stable

• The economic shock represented by the coronavirus pandemic will lead to a severe recession in Mexico in 2020. A recovery starting in 2H20 will likely be held back by the same factors that have hampered recent economic performance, which has lagged rating and income level peers.
• Even in the absence of a debt-financed fiscal response to the economic recession, general government debt/GDP is likely to jump by at least 6pp of GDP to almost 50%, the highest since the 1980s.
• The credible monetary policy framework built around a flexible exchange rate and inflation targeting remains a rating strength and will help the economy absorb the external shock, while minimizing current account external imbalances.
• The extent of the economic contraction and scope for recovery starting 2H20 will be dictated by prospects in the U.S., Mexico's main trading partner, as well as the duration of the virus shock domestically.

 (Source: Fitch)