S&P Global confirms rating of Guanajuato

Guanajuato presents prudent financial management in the face of economic challenges

Guanajuato’s robust pension system is sustainable over the long term

Guanajuato/Gto News

S&P Global Ratings has reaffirmed the global scale credit ratings of Guanajuato of ‘BBB’ and national scale ratings of ‘mxAAA’, maintaining a stable outlook on both scales.

This decision reflects the agency’s expectation that Guanajuato’s financial management will continue to pursue a prudent approach, which will translate into solid operating results and manageable deficits after capital expenditures in accordance with its scenarios.

S&P Global Ratings highlights that the State’s budgetary performance and debt management will be resilient, with solid fiscal balances and strong liquidity. The agency also underscores Guanajuato’s commitment to disciplined financial policies.

In its report, the agency highlights the key aspects that support this solid rating:

• Prudent and effective financial management: S&P Global Ratings projects that the Guanajuato government will maintain policy continuity and solid liquidity, even in the face of potential pressure on its economy due to uncertainty in international trade
• Solid budgetary performance: Projections indicate that fiscal balances will remain solid, with high operating surpluses and slight deficits after investment spending
• Low debt and strong liquidity: The debt level remains low and has a long-term maturity profile, reflecting the commitment to disciplined financial policies. The government’s liquidity is very strong, acting as a buffer against additional fiscal pressures
• Strong pension system: Guanajuato’s pension system is self-sufficient, with reserves projected through 2060 and long-term viability extending through 2095
• Active economy and fiscal transparency: Guanajuato’s new Government is focused on fostering the diversification and interconnection of industrial clusters, maintaining close communication with the private sector. Active management of local taxes, operating expense controls, a long-term financing policy, and high standards of fiscal transparency are expected, supporting financial management above the national average
• Resilience in the face of economic challenges: Although Guanajuato’s economy is heavily focused on manufacturing and exports, the government’s proactive decisions are expected to mitigate the risks associated with trade volatility and federal transfers. The State has tripled tax revenue in nominal terms since 2016, and its own-source revenue represents 16% of total operating income, exceeding the national average.

With this evaluation, Guanajuato closes the review period by the three internationally recognized rating agencies and remains one of the highest-rated States obtaining the highest credit quality.

Source: https://www.spglobal.com/ratings/es/regulatory/article/-/view/type/PDF/id/3412402

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