However, Moody’s cautioned that possible changes to energy policies could increase risks for the oil and gas industry, while uncertainty surrounding the new administration and the ongoing renegotiation of the terms of the North American Free Trade Agreement (Nafta) could lead to more volatile financial markets.
The agency believes that the incoming López Obrador administration will likely hand over construction of a new Mexico City international airport (NAICM) to the private sector rather than cancelling it. López Obrador has expressed misgivings about the US$13bn NAICM project, which is currently under construction, considering that it does not represent value for money. He has presented alternative projects and said that he will submit the matter to a binding public consultation before making a final decision.
Meanwhile, in a separate report released on 7 August, Moody’s predicted that the incoming López Obrador administration will increase public borrowing in order to boost domestic economic growth. But it expressed confidence that Mexico’s development banks boast strong quality indexes and a high level of capital, which will allow their financial fundamentals to remain unaffected if borrowing is increased at a sensible rate.
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