S&P raised its long-term foreign currency sovereign credit rating to "BBB+" from "BBB," and raised its short-term foreign currency rating to "A-2" from "A-3," the agency said in a news release.

It also lifted Mexico's long-term local currency credit ratings to "A+" from "A."

"The upgrade reflects both the expected strengthening of fiscal revenues in coming years and indications of renewed political dynamism that reduces the fear of policy gridlock," Standard & Poor's credit analyst Joydeep Mukherji said in a statement.

"The recent approval of fiscal reform is an important step in reducing the Mexican government's fiscal vulnerability to volatile oil prices and in meeting growing spending pressures," he added.

Last month, Mexican lawmakers approved a fiscal reform package that increases taxes on gasoline, corporations, gambling and some major stock market transactions, and introduces a 2 percent tax on cash bank deposits exceeding $2,250.