Leading rating agency, Fitch, has announced that prospects for an upgrade on Mexico's sovereign ratings will depend on the passage of a 'robust' tax reform package and the 'maintenance of fiscal discipline in the formulation of the 2002 budget.' In addition, the rating agency says it is also looking for continued economic resilience during the current global slowdown.
Fitch states that the passing of Mexico's tax reform package, which continues to be delayed in Congress as members repeatedly disagree over the bill's provisions, has gained even more urgency in the current economic climate. Given the development needs of the country and the narrow tax base, says Fitch, it will be essential to pass a set of tax reforms that improve the annual non-oil tax intake of the country.
Fitch currently rates the foreign and local currency obligations of Mexico as BB+ and BBB and the rating outlook is positive. The government is aiming for the next rating on the scale BBB- which would upgrade the country to investment grade.
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