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Mexico’s Debt Is Growing at An Alarming Rate, Experts Warn

By: Elena Toledo - @NenaToledo - Aug 30, 2016, 4:56 pm
According to experts, if public debt isn't reduced, there's risk of a crisis (Sputnik)
According to experts, if public debt isn’t reduced, the country is at risk of entering another crisis. (Sputnik)

EspañolMexico’s public debt is not at risk, but its rapid and sustained increase during the last six years is worrisome, analysts have recently raised the alarm.

If the problem is not addressed, some said it could drag down economic growth or cause a new debt crisis.

Public debt closed at 34.3 percent of GDP in 2012. This year, it’s expected to be at 48.5 percent.

As a result of accelerated growth in debt, agencies like Moody’s and Standard and Poor have decided to change Mexico’s evaluation to “negative.”

Director of the Observatory Mexico How Are We? Valeria Moy said the economic situation is not as bad as in the ’70s and ’80s, but Enrique Peña Nieto’s adminstration has begun to break down the country’s stability a bit.

“We are not at worrying levels, but the rating agencies already gave us a slap on the wrist.”

The four years that have passed during Enrique Peña Nieto’s adminstration have been characterized as the period of massive debt, which has been growing faster than the economy, according to Moy.

“If you let the debt-GDP ratio pass from 40 to 70 percent, then it may be a drag on the economy,” Jaime Reusche, Sovereign Credit Risk analyst for Moody’s Mexico, warned.

Source: El Universal.

Elena Toledo Elena Toledo

Educator by trade, social-media apprentice, activist for a democratic Honduras, and free thinker. Follow her on Twitter @NenaToledo.