The debt of the Mexican federal government increased by 3.3 points of GDP from 2019 to date, despite the fact that there was no countercyclical support program for the economy during the pandemic or on the way to recovery, reveals information from the Institute of International Finance (IIF, for its acronym in English).
According to their calculations, the general debt of the public sector is equivalent to 38.6% of the Mexican GDP, above the 38.3% of the Product that was managed in the second quarter of 2021 and far from the 36.4% of the GDP that it represented in the same period of 2019. .
However, within the “Global Debt Monitor”, which is published quarterly by the largest association of world financial institutions, it is observed that the debt managed by the Mexican government compares favorably with the average managed by world governments, which represents 102.3% of the GDP and also compares favorably with the average administered by emerging economies, which is 65.6% of GDP.
The sovereign analyst of the rating agency Moody’s for Mexico, Renzo Merino, identified as a strength for the rating of the sovereign its debt load with respect to that of other countries with the same rating as Mexico, that is, they are on the “Baa1”, which is two notches above investment grade.
But he clarified that this strength can present certain complications when the GDP slows down and when taking into account the interest burden.
The disaggregated information from the IIF for Mexico shows that the debt burden of financial corporations continues to slow down, since at the end of the second quarter of the year it represented 13.3% of GDP. The data contrasts with 14.6% of GDP that averaged in the same period of 2021.
As is the case with government debt, that of financial corporations compares favorably with the average managed by emerging peers, which according to the institute is at 38.4% of GDP and with 84.7% of GDP charged worldwide.
IIF data show that non-financial corporations operating in Mexico manage a debt equivalent to 23.8% of GDP, which also contrasts with the average for emerging countries, which amounts to 101.6 percent.
According to the institute, Mexican families and households that have resorted to indebtedness manage liabilities for 15.5% of GDP at the end of the second quarter, which shows a slight moderation from the 15.75% of GDP they managed in the same period last year.
This ratio of liabilities contrasts with the 46.9% managed on average by emerging market households.
Risks for emerging markets grow
This month’s report is entitled “Growing Risks for Emerging Markets”, referring to an increase in emerging market debt that shows the impact of a sharp economic slowdown that also suggests unresolved inflationary pressures.
They warn that the expectation of higher rates is also a latent risk for debt management in emerging economies and in the face of the tightening of global financial conditions, which will be particularly affected.
The IIF associates the largest number of financial institutions operating worldwide and counts among its members BBVA, Grupo Financiero Banorte, Bancolombia, Dubai International Finance Center, Bank OF China; Wells Fargo; Santander; Standard & Poor’s; Principal, Moody’s; Metlife, among others.
The methodology used by the IIF to measure debt is different from the one used by the Ministry of Finance, and which is called the Historical Balance of Financial Requirements of the Public Sector, which is expected to be 49.9% of GDP at the end of 2023.
hartford car insurance shop car insurance best car insurance quotes best online car insurance get auto insurance quotes auto insurance quotes most affordable car insurance car insurance providers car insurance best deals best insurance quotes get car insurance online best comprehensive car insurance best cheap auto insurance auto policy switching car insurance car insurance quotes auto insurance best affordable car insurance online auto insurance quotes az auto insurance commercial auto insurance instant car insurance buy car insurance online best auto insurance companies best car insurance policy best auto insurance vehicle insurance quotes aaa insurance quote auto and home insurance quotes car insurance search best and cheapest car insurance best price car insurance best vehicle insurance aaa car insurance quote find cheap car insurance new car insurance quote auto insurance companies get car insurance quotes best cheap car insurance car insurance policy online new car insurance policy get car insurance car insurance company best cheap insurance car insurance online quote car insurance finder comprehensive insurance quote car insurance quotes near me get insurance