Mexico's Finance Ministry disputes The Economist on debt rates

Mexico’s Ministry of Finance (SHCP) has issued a response to an article by The Economist regarding the country’s public finances. The British publication argued that despite maintaining investment grade status, Mexico is paying disproportionately high interest rates on its debt. Specifically, the report noted that 10-year dollar bonds yield 6.4%, a rate higher than countries with ‘junk’ status, such as Guatemala.

In its rebuttal, the SHCP stated that the article “omits the metrics that matter most to a market evaluation.” The Ministry emphasized that Mexico maintains its investment grade, its risk premium has decreased, and fiscal consolidation is progressing at an unprecedented scale.

However, questions remain regarding why Mexico’s borrowing costs exceed those of lower-rated nations. Additionally, reports from Bloomberg have suggested that bailouts for Pemex, totaling over $50 billion under President Claudia Sheinbaum, may be impacting the credit standing of Mexican bonds.