Trump's policies pose risk to Mexico's credit rating
Saturday - February 11, 2017 10:14 am ,
Category : WORLD
Mexico City:US President Donald Trump's potentially "disruptive changes to trade relations" can undermine the credit ratings of certain countries including Mexico, according to a new report.
"The Trump administration represents a risk to international economic conditions and global sovereign credit fundamentals," credit rating agency Fitch said in the report on Friday.
Mexico, which shares a 3,200 km border with the US and heavily relies on trade with its northern neighbour, is particularly vulnerable to "sudden, unanticipated changes in US policy", said the agency.
The statement said Fitch's revision of "Mexico's BBB+ sovereign rating to Negative in December partly reflected increased economic uncertainty and asset price volatility following the US election."
One of the biggest threats to Mexico's economy could come from mass deportations of undocumented Mexicans working in the US, which could notably diminish the flow of remittances, a key source of foreign revenue for Mexico, amounting to more than $24 billion in 2016.
The rating agency also said that Canada, a party to the North American Free Trade Agreement along with the US and Mexico, is also likely to be strongly affected.
Other countries most "at risk from adverse changes to their credit fundamentals" include China, Germany and Japan, according to Fitch.IANS
"The Trump administration represents a risk to international economic conditions and global sovereign credit fundamentals," credit rating agency Fitch said in the report on Friday.
Mexico, which shares a 3,200 km border with the US and heavily relies on trade with its northern neighbour, is particularly vulnerable to "sudden, unanticipated changes in US policy", said the agency.
The statement said Fitch's revision of "Mexico's BBB+ sovereign rating to Negative in December partly reflected increased economic uncertainty and asset price volatility following the US election."
One of the biggest threats to Mexico's economy could come from mass deportations of undocumented Mexicans working in the US, which could notably diminish the flow of remittances, a key source of foreign revenue for Mexico, amounting to more than $24 billion in 2016.
The rating agency also said that Canada, a party to the North American Free Trade Agreement along with the US and Mexico, is also likely to be strongly affected.
Other countries most "at risk from adverse changes to their credit fundamentals" include China, Germany and Japan, according to Fitch.IANS
