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Fitch Ratings
El Salvador's main credit weaknesses include its comparatively slow GDP growth, a narrow income base and rigid fiscal policy, particularly apparent in the light of the country's vulnerability to the US economic slowdown and corresponding drop in capital movement.
However, the Fitch rankings reflect the monetary stability provided by El Salvador's official dollarization, a good history of structural reform, a stable financial sector and continuing multilateral support.
In addition, the country managed to largely stave off the global financial crisis and cope with unprecedented internal political shake-up.
Source: Fitch Ratings Centroamerica
More on this topic
September 2011
On 9 September 2010, Moody's raised Costa Rica’s sovereign credit rating from Ba1, speculative grade, to Baa3 investment grade rating with a stable outlook.
An analysis of the issue by Aldesa follows:
The agency acknowledged, among other things, a stronger national economy in the face of external shocks, a healthy position in terms of net international reserves, stability in foreign direct investment flows and a willingness to responsibly manage the fiscal deficit during the coming years.
February 2012
Fitch Affirms Costa Rica’s International Rating as 'BB +', Outlook Stable
Fitch Ratings - New York - February 14th , 2012: Fitch Ratings has affirmed the International Ratings (IDR) and the Country Ceiling of Costa Rica, as detailed below:
- Classification of long-term foreign currency 'BB +';
June 2010
Moody's Investors Service on Wednesday upgraded Panama's sovereign ratings to investment grade of Baa3 from Ba1.
The change is based on a significant improvement in the country's fiscal and debt positions.
"The anticipated positive impact of fiscal policy initiatives on government accounts and prospects for sustained economic growth are at the core of the upgrade," said Alessandra Alecci, Moody's vice president and senior analyst. "The Panama Canal expansion and an ambitious infrastructure investment program are likely to support strong economic growth in the next few years, boding well for debt dynamics," added Alecci. The outlook is stable.
July 2010
Fitch Ratings has announced that the country’s long term foreign and local currency rating remains “BB” with a negative outlook.
Fitch has also announced El Salvador’s short term rating as “B” and the country’s rating as “BBB-”.
El Salvador’s risk profile is a function of its monetary stability (helped by its official dollarization), a good history of structural reform, a stable financial system and the continuing support of multinational institutions. In addition, the country has coped well with the global financial crisis and unprecedented domestic political transition, in which the left-wing FMLN government took power after approximately 20 years of rule by the right-leaning ARENA party.
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