LatinNews Daily - 05 September 2019

* Moody’s Investor Service has once again warned that the biggest financial risk faced by the Mexican government is its plan to provide financial assistance to the troubled state-owned oil firm, Pemex. During a conference organised by Moody’s in Mexico City, Moody’s analyst Ariane Ortiz-Bollín said that the plans to shore up Pemex’s finances represent more of a liability for public finances than increased government spending. Ortiz-Bollín explained that the Mexican government plans to invest 1%-2% of GDP in Pemex to help reduce its debts and boost production. But in her opinion the government’s calculations are “too optimistic and the firm is going to need more investment”, with Moody’s putting this figure at around US$20bn a year. Back in June, Moody’s downgraded its outlook on Pemex’s and Mexico’s credit ratings to ‘negative’ and Ortiz-Bollín said that both could be downgraded at the start of next year if Pemex’s finances don’t look like improving.

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