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Mexico & Nafta - April 2019

Economic Highlights

Pemex losses: On 27 February Mexico’s state-owned oil company Pemex reported annual losses of M$148.63bn (US$7.7bn) in 2018, 47% less than that reported in 2017. Total income was M$1.68trn – up from M$1.39trn in 2017. International credit ratings agency Fitch downgraded Pemex’s Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDRs) to ‘BBB-’ from ‘BBB+’ and its National Long-Term ratings to ‘AA(mex)’ from ‘AAA(mex)’, with its rating outlook 'negative'. According to a Fitch statement, these downgrades apply to approximately US$80bn of notes outstanding and all national scale long-term issuances. The statement underlines that “the ratings are constrained by Pemex’s substantial tax burden, high leverage, significant unfunded pension liabilities, large capital investment requirements, negative equity and exposure to political interference risk”.

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