In the absence of a revised strategy, we think Mexico and Pemex seem likely to suffer further rating downgrades:
Last week, Pemex announced it would take back exploration and production blocks earmarked for auction in October – Mexico’s National Hydrocarbons Commission has now cancelled the auction. This represents another roll-back of the energy reform approved under the previous administration.
In addition (or, perhaps, as a result), Moody’s said yesterday that it expects the Mexican economy to weaken further this year, likely forcing additional spending cuts from the government to enable it to meet the primary fiscal surplus in this year's federal budget...
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