Trump’s policies pose risk to Mexico’s credit rating

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U.S. President Donald Trump’s potentially “disruptive changes to trade relations” can undermine the credit ratings of certain countries including Mexico, credit rating agency Fitch said on Friday.

TRUMP“The Trump administration represents a risk to international economic conditions and global sovereign credit fundamentals,” said the agency in a statement on its website.

Mexico, which shares a 3,200-km border with the United States and heavily relies on trade with its northern neighbor, is particularly vulnerable to “sudden, unanticipated changes in U.S. policy,” said the agency.

The statement said Fitch’s revision of “Mexico’s BBB+ sovereign rating to Negative in December partly reflected increased economic uncertainty and asset price volatility following the U.S. election.”

One of the biggest threats to Mexico’s economy could come from mass deportations of undocumented Mexicans working in the Unitd States, which could notably diminish the flow of remittances, a key source of foreign revenue for Mexico, amounting to more than 24 billion U.S. dollars in 2016.

The rating agency also said that Canada, a party to the North American Free Trade Agreement along with the United States and Mexico, is also likely to be strongly affected.

Other countries most “at risk from adverse changes to their credit fundamentals” include China, Germany and Japan, according to Fitch. Enditem

Source: Xinhua/NewsGhana.com.gh

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