El Salvador: Tax Efforts are Insufficient

Fitch notes that the Salvadoran government’s efforts to achieve a consolidation of its fiscal deficit are insufficient and are threatened by a weak economic outlook.

Thursday, November 15, 2012

In a special report, Fitch Ratings said that El Salvador is making progress towards fiscal consolidation, but the momentum may be insufficient, given the poor prospects for economic growth. Currently, Fitch maintains a negative outlook on the rating of "BB" in the country, reflecting the rating agency's concerns about the high debt levels that are limiting the government's ability to cope with future external shocks.

The executive and legislative branches have agreed to bring public finances under a more sustainable management. A new tax reform and strategies to reduce spending could lower fiscal deficits in 2013 and 2014, but that may be insufficient to improve the debt situation, given the low growth prospects. "Even if you lower the fiscal deficit with the reforms, the financial debt of the public sector could be maintained above 51% of GDP, well above the median of 38% of the other BB-rated countries", said Santiago Mosquera, director of Latin America Sovereigns for Fitch.

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Panama: Fitch Downgrades Risk Outlook

February 2020

The rating agency maintained BBB's long-term issuer default rating, but decided to change the risk outlook from stable to negative, arguing that the debt burden will continue to increase in 2020.


The revision of Panama's Outlook to Negative reflects a marked deterioration in fiscal deficits and a significant increase of the government's debt burden, related to accumulation of arrears by previous administration and higher fiscal deficit targets under the modified Fiscal Responsibility Law. In addition, the recent greater-than-anticipated growth deceleration creates additional challenges for fiscal consolidation.

Costa Rica: Fitch Maintains Sovereign Rating

January 2016

The agency has maintained its BB + rating with a negative outlook but again warned about the high fiscal deficit and the difficulties the country faces in passing a tax reform bill.

From a statement issued by Fitch Ratings:

Fitch Ratings-New York-20 January 2016: Fitch Ratings has affirmed Costa Rica's Long-term foreign- and local-currency IDRs at 'BB+'.

Costa Rica: Fitch Changes Outlook to "Negative"

January 2015

In a clear warning signal, the ratings agency has changed the outlook for Costa Rica's sovereign debt from stable to negative, arguing that there is a lack of measures to reduce the fiscal deficit.

From a statement issued by Fitch Ratings:

Fitch Ratings-New York-22 January 2015: Fitch Ratings has revised the Rating Outlook on Costa Rica's Long-term foreign and local currency Issuer Default Ratings (IDRs) to Negative from Stable and affirmed the IDRs at 'BB+'. The issue ratings on Costa Rica's senior unsecured foreign and local currency bonds have been affirmed at 'BB+'. The Short-term foreign currency IDR has been affirmed at 'B' and the Country Ceiling at 'BBB-'.

Fitch Ratings Affirms Rating of BB + for Guatemala

August 2012

The agency has affirmed the international rating of Guatemala as 'BB +' with Stable Outlook.

From a statement by Fitch Ratings:

Fitch Ratings-New York-31 July 2012: Fitch Ratings has affirmed the issuer default rating (IDR) and the Country Ceiling for Guatemala as follows: