Mexico - Trip Notes

Our t akeaways: 1 - We started our trip with a negative economic outlook given the policy direction of the current administration but leave Mexico cautiously and marginally optimistic. 2 - This optimism originates from the Finance Ministry’s expected backing of Pemex, Mexico’s state-owned oil company. This plan is expected to be unveiled in the coming days, providing multiyear financial support for Pemex. Aside from Finance Ministry funding, this arrangement will maintain fiscal prudence for the public sector. Pemex is also exploring mechanisms to attract private investment to boost exploration and production of crude. These measures could be positive for market sentiment. However, there are risks of: President Andres Manuel Lopez Obrador (AMLO) suddenly changing position, the package failing to sufficiently shield the fiscal accounts, or being unable to shift market fears towards Pemex in the face of a potential rating downgrade.