Fitch Ratings downgraded Mexico's credit rating Monday, saying dependence on a flagging oil sector has weakened the country's ability to weather financial problems. Mexico's rating remained at investment grade, but the downgrade will bring a rise in the government's borrowing costs.

Fitch said decreased oil production has already accentuated economic problems in Mexico and output could continue to decline. Fitch said it lowered Mexico's foreign currency Issuer Default Rating to BBB from BBB+ and its local currency IDR to BBB+ from A-.


Mexico's Treasury Department noted the new rating is still two levels above the minimum for investment grade.

It said in a statement that the government of President Felipe Calderon has made important advances to address the structural weaknesses pointed out by Fitch and implement reforms that can increase competitiveness and growth.