July 2 (Bloomberg) -- Mexico’s credit rating will be cut in the third quarter as the government struggles to muster congressional support for legislation that would ease the nation’s dependence on oil revenue, said Claudio Loser, a former International Monetary Fund Western Hemisphere director,

A reduction in Mexico’s credit rating is “overdue,” Loser, who now heads the Latin American operations of strategic advisory firm Centennial Group Inc., said in a telephone interview from Washington. He forecasts Mexico’s economy will shrink 5 percent this year.

Mexico is rated BBB+ by Standard & Poor’s and Baa1 by Moody’s Investors Service, the third-lowest investment grade ratings.

To contact the reporter on this story: Valerie Rota in Mexico City at vrota1@bloomberg.net

Last Updated: July 2, 2009 14:50 EDT