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LatinNews Daily - 29 July 2019

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In brief: Mexican government warned on need to restructure Pemex

* The Latin American committee on macroeconomic and financial issues (CLAAF), an association composed of prestigious independent Latin American economists, has warned that the Mexican government must restructure the state-owned oil company Pemex to address its “weak financial situation and declining output”. On 26 July Pemex reported that during the second quarter of 2019, total sales fell by -13.6% to reach M$376.7bn (US$19.4bn), as compared to 2Q18, mainly as a result of a decrease in domestic sales by -14.4% - and a decrease in export sales of -13.0%. However, according to the Pemex report for 2Q19, net loss was reduced by 67.6%, as compared to 2Q18, to M$52.8bn down from M$163.2bn. According to CLAAF, “investors have become increasingly weary of holding Pemex bonds and, following its credit risk downgrade, the spread differential between Pemex and the sovereign has increased by 100 basis points”.