JOIN USCredit rating agency Moody's Investors Services said on Monday that it had revised down its forecast for Mexico's economic performance in 2020 to a contraction in gross domestic product (GDP) of 7% from a contraction of 3.7% previously.
"While the coronavirus outbreak represents a large and negative shock to the economy, weak medium-term economic growth prospects and substantial, ongoing support to Petroleos Mexicanos are the main challenges the sovereign faces," Moody's said.
The ratings agency rates the Mexican sovereign Baa1, with a negative outlook, signaling that another downgrade is likely. It forecast GDP to grow 2.2% in 2021.
However, it warned that Latin America's second-largest economy could contract more than anticipated and that the recovery from the novel coronavirus could also take longer.
"If the pandemic worsens, pressures to increase government spending would add to the deterioration of fiscal and debt dynamics," it said.