Moody's downgrades Mexican government's outlook to 'negative' over weakening of judiciary and debt

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Moody's downgrades Mexican government's outlook to 'negative' over weakening of judiciary and debt

2024-11-16 07:12 Last Updated At：07:21

MEXICO CITY (AP) — Mexico’s president lashed out Friday at Moody’s ratings service, after it downgraded the Mexican government’s debt outlook to “negative.”

Moody’s said it had downgraded the government's debt outlook from “stable” to “negative” because newly approved laws in Mexico could weaken the judiciary branch and checks and balances. It reaffirmed Mexico’s Baa2 overall credit rating, but said increased government debt represented a risk for Mexico.

It also mentioned the possibility that the government will have to transfer more money to shore up the highly indebted state-owned oil company, Pemex.

“Deteriorating debt affordability and further government spending rigidity make fiscal consolidation challenging, following this year’s widening in the government deficit,” Moody’s wrote, “a deviation from a longstanding track record of low deficits regardless of economic pressures.”

President Claudia Sheinbaum said that ratings agencies often have a “bias of origin” against the economic policies her party adopted under former President Andrés Manuel López Obrador, who took office on Dec. 1, 2018.

“Many times these ratings agencies are aimed at issuing evaluations starting from an economic model,” Sheinbaum said. “Starting in 2018, the economic model in our country changed. Many times these ratings have this bias of origin.”

Under López Obrador, who was Sheinbaum's political mentor, the government began transferring large amounts of money to the state-run oil company, started large building projects and implemented cash handout programs. That led to federal budget deficits of about 6% of Mexico's gross domestic product in 2024.

Sheinbaum ruled out enacting new taxes next year and said she would rely on increasing tax collection from existing sources. But in the 2025 federal budget submitted by her administration to Congress on Friday, it was clear that sizable budget deficits would continue for some time.

Mexico's treasury department said it would aim to reduce the deficit to 3.9% of GDP in 2025, but it was unclear if it could achieve that: López Obrador left behind a lot of unfinished train and oil refinery projects, and Sheinbaum has expanded benefit programs for the elderly.

“The government will only gradually narrow the deficit in coming years,” Moody's wrote.

The 2025 budget says Mexico's outstanding federal debts would finish 2025 at around 51.4% of GDP. But that doesn't include a lot of government oil company and pensions debts. It also predicted the economy would grow by between 2 and 3% in 2025, something analysts say is optimistic, given that Mexico's GDP grew by only 1.5% in the third quarter of 2024.

The government is also expecting the exchange rate to improve to 18.70 pesos to $1 and inflation to fall to 3.5%, both of which also seem highly optimistic. The Mexican peso has dropped in value to about 20.40 to $1 in recent days.

The election of Donald Trump in the United States may also weigh on Mexico's economy, given his past threats to close the border and impose tariffs.

Moody's said Mexico has been benefitting from “nearshoring” investments by companies seeking to move production closer to the U.S. market.

But it noted “additional downside risks to investment dynamics could emerge ahead of the revision of United States-Mexico-Canada Agreement (USMCA) in 2026, particularly if modifications to the agreement’s rule of origins, labor specifications and other US trade policies towards Mexico changed in a way that durably limit the country’s exports.”

“Lower economic growth and, consequently, government revenue would undermine fiscal consolidation efforts,” it continued.

Perhaps most importantly, Sheinbaum has continued López Obrador's push to implement changes to the judiciary that will make all federal judges stand for election in 2025 and 2026.

The U.S. government and business groups worry that could weaken the independence of the courts, and make them vulnerable to political pressure. Critics say that could also allow drug cartels to fund judges' election campaigns and get their own candidates elected.

“The constitutional overhaul risks eroding checks and balances of the country’s judiciary system, with potential negative impact to Mexico’s economic and fiscal strength,” it continued, adding the changes “have the potential to materially alter the checks and balances and the business operating environment in the country.”

Follow AP’s coverage of Latin America and the Caribbean at https://apnews.com/hub/latin-america

Trial begins for the man accused of killing Georgia nursing student Laken Riley

2024-11-16 07:11 Last Updated At：07:21

ATHENS, Ga. (AP) — A Venezuelan man "went hunting for females on the University of Georgia’s campus” earlier this year and ended up killing nursing student Laken Riley after a struggle, a prosecutor said Friday. A defense attorney said the evidence is circumstantial and doesn't prove his client is guilty.

Jose Ibarra, who entered the U.S. illegally two years ago, is charged with murder and other crimes in Riley's February killing, which helped fan the immigration debate during this year's presidential campaign. Ibarra waived his right to a jury trial, meaning his case is being will be heard and decided by Athens-Clarke County Superior Court Judge H. Patrick Haggard.

Prosecutor Sheila Ross told the judge that Ibarra encountered Riley, a 22-year-old student at Augusta University College of Nursing, while she was out running on Feb. 22.

“When Laken Riley refused to be his rape victim, he bashed her skull in with a rock repeatedly,” Ross said, adding that the evidence will show that Riley “fought for her life, for her dignity.”

As a result of that fight, Ibarra's DNA was left under her fingernails, Ross said. Riley called 911 and, in a struggle over her phone, Ibarra's thumbprint was left on the screen, she said.

The forensic evidence is sufficient to prove Ibarra's guilt, but digital and video evidence will also show that Ibarra killed Riley, the prosecutor said.

Defense attorney Dustin Kirby called the evidence in the case graphic and disturbing, but he said none of it proves that his client killed Riley.

“The evidence in this case is very good that Laken Riley was murdered," he said. "The evidence that Jose Ibarra killed Laken Riley is circumstantial. The evidence that anyone had any intent or certainly committed any sexual assault is speculation.”

The killing added fuel to the national debate over immigration when federal authorities said Ibarra illegally entered the U.S. in 2022 and was allowed to stay to pursue his immigration case.

Republicans, including President-elect Donald Trump, blamed Democratic President Joe Biden’s border policies for her death. As he spoke about border security during his State of the Union address weeks after the killing, Biden mentioned Riley by name.

Riley's mother, Allyson Phillips, and other family members packed the courtroom Friday. Phillips put her face in her hands and cried frequently, especially when photos of her daughter were shown and during testimony about what happened to her.

Ibarra sat at the defense table in a plaid shirt with his hands and feet chained. He wore headphones to hear a Spanish-language interpreter and appeared attentive, sometimes looking up when photos or video were shown and sometimes looking down at his lap.

During her opening statement, Ross laid out a timeline for the judge using doorbell and surveillance camera footage as well as data from Riley’s phone and watch to piece together her final moments.

Riley left home at 9:03 a.m. and headed for wooded trails where she often ran. Data from her watch shows that at 9:10 a.m., she was running at a fast pace when something happened that made her “stop dead in her tracks,” and she called 911 at 9:11 a.m.

A 911 dispatcher answered but no one responded when she repeatedly sought a response, and then the call was ended by the caller. The dispatcher immediately called back, but no one answered.

“Her encounter with him was long. Her fight with him was fierce,” Ross said, noting that Riley's watch data showed her heart was still beating until 9:28 a.m.

Ross also played security camera video that shows a man she said is Ibarra at 9:44 a.m. in a parking lot at his apartment complex. The man tossed something in a recycling bin and then appeared to throw something in nearby bushes. In the recycling bin, officers found a dark hooded jacket with blood that turned out to be Riley's on it and strands of long dark hair caught on a button. In the bushes, they found black disposable kitchen gloves, one of which had a hole in the tip of the thumb.

Another video from about 35 minutes later shows what appeared to be the same man wearing different clothes and walking toward a trash bin with a bag and then walking back empty-handed. That bin was emptied before police were able to search it.

One of Riley's three roommates testified that she became worried when Riley didn't return from a run. The four friends used a phone app to track each other's whereabouts, and Lilly Steiner testified that she became more worried when she saw that Riley's phone showed her in the same location for a long time.

Riley often talked to her mother by phone when she ran, and her mother also became concerned that morning when her daughter didn't answer her calls.

Steiner and another roommate, Sofia Magana, walked to the trail where the phone app indicated Riley was located. They found what they believed was one of Riley's AirPod earbuds on the trail and returned home to call police.

One of the officers who responded found Riley's body partially covered by leaves, 64 feet (nearly 20 meters) off the trail. Although her shirt and underwear had been pulled up, Ross said there was no evidence that Riley had been sexually assaulted.

Before Ross played Maxwell's body camera video in court, she warned Riley's family that video of her dead body would be shown. Riley's mother left the courtroom, but other family members and friends remained in the courtroom, some of them crying or covering their faces.

Ibarra is charged with one count of malice murder, three counts of felony murder and one count each of kidnapping, aggravated assault, aggravated battery, hindering an emergency telephone call, tampering with evidence and being a peeping Tom.

Prosecutors say that on the day of Riley’s killing, Ibarra peered into the window of an apartment in a university housing building, which is the basis for the peeping Tom charge.