Veracruz bets on public policy of financial responsibility


HR Ratings improved the financial perspective of Veracruz, with which it is expected to achieve a type “A” rating soon, state authorities announced.

In a conference, the governor of Veracruz, Cuitláhuac García Jiménez, reported that the agency ratified the entity’s credit rating at “BBB+” and changed the outlook from stable to positive.

According to the president, the results are due to the fact that they have focused on correcting the indebtedness and implementing a public policy focused on credit and financial responsibility.

“It allows us more resources and better conditions to meet the various demands,” he said.

In this regard, the Secretary of Finance and Planning, José Luis Lima Franco, explained that the ratification and the improvement of the perspective are due to the decrease in liabilities with the Tax Administration Service (SAT).

“There are fewer and fewer short-term loans at the end of the year, while maintaining sustainable debt,” he deepened.

The Positive outlook is due to the 13.9% reduction in current liabilities (PC) as a result of the payment of tax credits that were within the contingent liabilities generated in the 2015 Public Account.

With this, the PC to Free Disposal Income metric decreased from 27.6% in 2020 to 20.6% in 2021 (vs. 24.5% projected).

“For the 2022-2025 period, a surplus in the primary balance of 2.8% of total income is estimated, in accordance with the estimated growing trend in own income. With this, it is projected that the state will gradually reduce the use of short-term debt in the coming years,” the report deepened.

Additionally, the rest of the resources of the long-term structured financing contracted during 2021 for a total amount of 3,100 million pesos are expected, with which the adjusted net debt would report an average level of 71.7% from 2022 to 2024, which is in line with the previous estimate of 73.3% for the same period.

In addition to this rating, Lima Franco pointed out that Moody’s and Fitch Ratings agencies are expected to issue their evaluation during the year; both companies have Veracruz with a “triple B” rating.

“A rating is likely to be reached in 2023,” the secretary said.

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