moodys investors service late friday downgraded its rating on mexicos sovereign bonds to baa2 the nexttolast rung of investment grade saying that the countrys economy will remain constrained by weak investment prospects and the economic scarring from the pandemic will not reverse moreover mexicos fiscal prospects will suffer from the countrys increased expenditure rigidity related to supporting stateowned enterprises particularly pemex and higher spending in pensions and flagship projects while lower financial buffers as fiscal stabilization funds have been virtually depleted the debtrating agency said combined these elements will restrict the authorities ability to manage shocks in the coming years moodys said moodys also changed its outlook on mexico to stable from negative moodys had held its mexico rating at baa1 since april 2020