Moody's downgrades Mexican government's outlook to 'negative' over weakening of judiciary and debt

MEXICO CITY (AP) — Mexico’s president lashed out Friday at Moody’s ratings service, after it downgraded the Mexican government’s debt outlook to “negative.”

Moody’s said it had downgraded the government's debt outlook from “stable” to “negative” because newly approved laws in Mexico could weaken the judiciary branch and checks and balances. It reaffirmed Mexico’s Baa2 overall credit rating, but said increased government debt represented a risk for Mexico.

It also mentioned the possibility that the government will have to transfer more money to shore up the highly indebted state-owned oil company, Pemex.

“Deteriorating debt affordability and further government spending rigidity make fiscal consolidation challenging, following this year’s widening in the government deficit,” Moody’s wrote, “a deviation from a longstanding track record of low deficits regardless of economic pressures.”