Moody’s credit agency raised the credit rating for Mexico by one notch on Wednesday lauding the country’s ambitious reform programme.
By moving the rating up one notch to ‘A3′, Moody’s elevated Mexico to its top tier of lending nations just when a long list of other emerging economies are under acute financial pressure.
In an unusually complimentary statement, the agency hailed “the structural reforms approved last year, which Moody’s expects will strengthen the country’s potential growth prospects and fiscal fundamentals.”
Receiving the praise is the centrist government of President Enrique Pena Nieto, which has pushed through a series of major structural reforms since taking office in December 2012.
Since then, Mexico’s Congress has approved reforms of banking, education, telecommunications, tax collection and a historic opening of the state-controlled energy industry.
“After 20 years of attempts by three different administrations to push through a reform agenda, the approval of reforms not only reflects strong political will and ability to deliver campaign promises, but in some instances also exceeds initial expectations,” the agency said.
The energy reform was arguably the most difficult challenge.
It lets private firms explore and extract oil and gas as well as share profits, production and risks with state-run energy giant Pemex, ending a ban cemented in the constitution.
On the back of the changes, Moody’s said it now expects Mexico’s GDP growth range to “gradually shift to the 3-4 percent range from its pre-reform 2-3 percent reference level”.
[Image via Agence France-Presse]