Fitch Ratings raised on Aug. 3 the outlook on Mexico's long-term foreign and local currency issuer default ratings to stable from negative, citing reduced downside risks to the country's growth and expected stabilization of its public debt burden.
The rating agency said Mexico's economy would grow 2% in 2017 and post an average 2.4% growth from 2018 to 2019.
Inflation reached 6.3% in June, double the 3% inflation target. Fitch estimates the inflation rate will decline below 4% in 2018.
The current account deficit narrowed to 2.1% of GDP in the first quarter of 2017 from increased remittance inflows and a surplus in the non-oil trade balance. Fitch expects the current account deficit to remain at an average of 2.2% of GDP from 2017 to 2019.
Fitch said a renegotiated North American Free Trade Agreement is unlikely to crimp Mexico's access to the U.S. market, though a prolonged period of uncertainty about the deal could weigh on investment decisions. Fitch warned that Mexico could receive a rating downgrade if its economic links with the U.S. deteriorate, or if the government debt burden increases.
A reduced fiscal dependence on oil income would help the country get a rating upgrade.
S&P Global Ratings also revised its outlook on Mexico's long-term ratings to stable from negative on July 18.
S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.