Mexican banking sector faces risks from USMCA uncertainty and inflation

Major credit rating agencies, including S&P Global Ratings, Moody’s, and Fitch Ratings, have identified significant risks facing the Mexican banking sector. Key pressures include persistent inflation, economic deceleration, and uncertainties surrounding the United States-Mexico-Canada Agreement (USMCA).

The USMCA is undergoing a transformation that may reduce long-term legal certainty. The agreement is projected to become a revisable contract annually until 2036, potentially undermining the stability required for strategic corporate investments. Furthermore, shifts in U.S. trade policy could impact business confidence and delay investment decisions.

In addition to trade concerns, global volatility is contributing to domestic risks. Indirect effects from conflicts in the Middle East, such as rising energy and food prices, are driving inflation. S&P estimates that credit losses for banks in the region could fall between 1% and 4% due to high interest rates and slowing credit growth.