Central America: External Vulnerabilities in Focus

This special report examines the channels through which Fitch-rated sovereigns in this sub-region could be impacted by external shocks, the robustness of their various policy frameworks and the implications for creditworthiness of increasingly challenging international conditions.

Tuesday, October 21, 2008

The US financial crisis has spread across the international financial system.
Given the important trade and financial linkages with the global economy,
Central America, the Dominican Republic and Panama are vulnerable to
contagion through slower global demand and tighter international liquidity,
particularly at a time when the need for foreign financing has increased.
A weakened US economy means adverse consequences for growth in Central America. While downside risks are mounting, Fitch does not expect regional growth rates to fall as low as their 2001 nadir of 1.7%. Even excluding Panama as an outlier, aggregate growth is currently forecast to decelerate to 4.3% in 2008 and 3.7% in 2009, suggesting ...



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Central American Banks: Special Report

September 2011

Fitch Ratings has issued a special report entitled, "Central American Banking: After the Crisis, a Disparate Evolution"

In Fitch's opinion the banks have shown a mixed performance in Central America during the period of the global financial crisis. At the same time, banking systems have dissimilar perspectives on future performance, reflecting different economic growth prospects in the region.

Fiscal credibility and sovereign risk

January 2010

Fitch Ratings warned that although Central American sovereigns have resisted the global crisis pretty well so far, they now require fiscal consolidation in order to maintain their credit ratings.

Summary
Fitch‐rated Central American sovereigns have thus far withstood the destabilizing effects of the global economic and financial crisis, despite monetary and exchange rate policy challenges.

Fitch Comment on El Salvador

March 2009

The new government of El Salvador faces a difficult economic reality

El Salvador elected a new president on March 15. Mauricio Funes of theFMLN party will take the presidency in what appears to be a difficult adjustment period for the global economy and particularly for El Salvador because it will have to face a disproportionate impact from the US recession and narrow external liquidity conditions.

The financial crisis: the inevitable adjustment

October 2008

When the true economic value is too far from the fabulous figures invented by financial engineering, crisis - and an adjustment - is inevitable.

Cristóbal Perez-Jerez Alvarado, MBA in international economics, analyzes, with the very much needed academic indifference of today (and also the very scarce common sense), the current financial crisis.

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