The rating agency affirmed the Central American Country’s Long-Term Foreign Currency Issuer Default rating at "B-" and reviewed the rating outlook to stable from negative.
Nicaragua's ratings are constrained by the lowest average World Bank Governance Indicators score in the Americas rated by Fitch, low per capita income, political stability risks, and international sanctions that limit future external financing, the rating agency's analysis highlights.
Without clarifying which companies or individuals could apply the measure, the Bukele administration announced a three-month exemption from payment of mortgage loans, services such as water, electricity, Internet, cable and telephone.
These measures may be applied by all those "... natural and legal persons, which are directly affected by the covid-19 pandemic and government institutions must ensure that in their implementation there is no abuse or exploitation". As a result of this announcement, uncertainty has arisen as it is not clear how those "directly affected" will be determined.
Arguing that continuity in economic policies is expected after the change of administration in January 2020, Standard & Poor's maintained the country's credit risk rating at BB-.
From S&P report:
S&P Global Ratings confirmed its long-term sovereign credit ratings of "BB-" in long-term foreign currency and "BB" in Guatemala. The outlook for our long-term ratings remains stable.
Fitch Ratings decided to keep the country's risk rating at B, but changed the outlook from negative to stable, arguing that there are some signs of stabilization of Central Bank reserves and commercial bank deposits.
The revision of the outlook reflects the stabilization of central bank reserves and commercial bank deposits, a significant fiscal adjustment and social security reform that have reduced domestic financing needs and a pronounced external rebalancing that has facilitated the external financing requirement, the rating agency reported.
Standard & Poor's warned that if in the coming months the political environment worsens or access to local and external financing deteriorates again, the debt note could suffer further deterioration.
Fitch Ratings kept in B+ with a negative outlook, the sovereign debt rating, arguing that "the weaknesses in public finances are reflected and the political stagnation has prevented the timely approval of reforms that address these problems."
The new fiscal rule has not been approved, and the Congressional authorization requirement for foreign loans periodically restricts Costa Rica's financial flexibility, is another of the risk qualifier's arguments.
Institutional problems and lower levels of economic growth compared to other countries with the same risk rating, could cause in the future a degradation of Guatemala's debt rating.
Guatemalan businessmen assure that the change from Stable to Negative made by Fitch Ratings in the country's risk perspective should be taken seriously, since investments could stagnate.
On April 11, Fitch announced that it maintained its "BB" rating for long-term foreign currency debt default, but decided to modify the outlook because the country reflects political tension and greater uncertainty in agents, as well as a constant erosion in the government's low tax collection.
Fitch Ratings confirmed the long-term foreign currency debt default rating of "BB", but changed the outlook from stable to negative.
The review of Guatemala's negative outlook reflects political tension and greater uncertainty in agents, as well as a constant erosion in the government's low tax collection, the rating agency argued.
Because of its strong and stable macroeconomic performance, Fitch confirmed the long-term foreign currency rating at 'BBB', with a stable outlook.
For the risk qualifier, the country's macroeconomic performance has driven a sustained increase in per capita income, and it also forecasts that GDP growth will recover to 5.8% in 2019 and 5.5% in 2020, above countries with similar ratings.
Standard & Poors raised the rating from CCC+/C to B-/B, with a stable outlook, arguing that in the next three years the fiscal deficit will be moderate, and its debt levels will remain unchanged.
From the Standard & Poors report:
RATINGS
Foreign Currency: B-/Stable/B
Local Currency: B-/Stable/B
For further details see Ratings List.
The deterioration of public finances and the inability of the Alvarado administration to end the blockades set up by trade unionists are again drawing the attention of rating agencies and the international market, who foresee a complicated economic future for Costa Rica.
According to the risk rating agency Moody's, the demonstrations by public sector unions are increasingly complicating the path towards a much-needed reform of public finances, which would take its first steps with the approval of the bill that is being discussed in the Legislative Assembly.
Citing a long history of fiscal and monetary policy characterized by prudent management, the rating agency Moody's maintained the country's credit risk rating in Ba1.
From a statement issued by the Bank of Guatemala:
June 2018.Moody's Investors Service maintains the credit risk rating for Guatemala at Ba1 with a stable outlook.
The IMF believes that the financial stability framework is not well prepared to handle a potential systemic financial crisis without seriously compromising fiscal resources.
In a review carried out late last year, the International Monetary Fund identified serious vulnerabilities in the pension sector, secondary markets and crisis management mechanisms and stated that they need to be taken care of immediately.