Economics: A new strategic plan and a T-bill backed financing mechanism are the latest efforts to rescue an inwardly focused Pemex
A new financing mechanism for Pemex was announced at the end of July. Although it involves taking on more debt, those liabilities are to be recorded off-balance sheet and could be implemented once again in the near future. It was unveiled not long before Pemex announced its "Strategic Plan 2025-2035," at the beginning of August. Generally speaking, the Plan was designed with good intentions, and some of its objectives are likely to be met but this could prove detrimental to Pemex's finances and/ or those of the public sector as a whole. This week’s Outlook analyzes the prospects of the financing mechanism and those of the Plan, as well as the major hurdles that lie ahead for the national oil company and the extent to which efforts to rescue the company will increasingly weigh on both public finances and Mexico’s sovereign debt rating.
The indicators section contains the latest industrial activity results, which show further sequential and annual setbacks in June. For the first half of the year only about a third of industrial subsectors recorded positive growth, suggesting that the outlook for the rest of the year remains negative. Of the four broad industrial sectors, only manufacturing showed growth, an uptick threatened going forward by international uncertainty.
Now read on...
Register to sample a report