Fitch Ratings has upgraded the Republic of Panama's long-term foreign currency and local currency Issuer Default Ratings (IDRs) to 'BBB-' from 'BB+'. Both Rating Outlooks remain Positive. Fitch has also upgraded the short-term foreign currency IDR to 'F3' from 'B' and the country ceiling to 'A-' from 'BBB+'.
The upgrades reflect a sustained improvement in public finances, underpinned by recent tax reforms, and the economy's resilience to the global financial crisis and associated recession. Although economic growth decelerated to 2.4% in 2009 from 10.7% in 2008, it was one of the strongest rates of growth in Latin America and among 'BBB' rated peers. Similarly, fiscal deterioration was moderate, especially by international standards while Panama's general government debt/GDP ratio stabilized around 45%. The Positive Outlook reflects the expectation that government debt/GDP ratio will further decline as the growth accelerates and fiscal discipline is maintained despite an ambitious public investment program.
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May 2010
On March 2010, Fitch Ratings raised Panama’s long-term foreign currency and local currency Issuer Default Ratings (IDRs) to 'BBB-' from 'BB+'.
The upgrades reflect a sustained improvement in public finances, underpinned by recent tax reforms, and the economy's resilience to the global financial crisis and associated recession.
September 2010
Fitch Ratings has recently confirmed that the country's local and foreign currency risk classification as 'BB', with Outlook Negative.
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.
March 2011
Fitch upgraded Foreign currency IDR to 'BB+' from 'BB'; Country ceiling to 'BBB-' from 'BB+'; Local currency IDR affirmed at 'BB+'; and Short-term IDR affirmed at 'B'. The Rating Outlook is Stable.
From the Fitch Report:
"The upgrade reflects Costa Rica's better than expected economic resilience during the global credit crisis, steadily improving macroeconomic stability underpinned by lower inflation and higher international liquidity as well as the country's relatively modest external indebtedness.
May 2010
Standard & Poor’s rated Panama as investment grade; Fitch did the same two months ago.
The risk rating agency raised Panama's long-term foreign- and local-currency sovereign credit ratings to “BBB-” from “BB+”.
"The upgrade reflects our assessment that continued economic growth--combined with moderate fiscal deficits--should reduce the government's debt burden and maintain its financial profile comfortably in line with that of other sovereigns in the 'BBB' rating category," said S&P credit analyst Roberto Sifon-Arevalo. The outlook on Panama is stable.
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