Sovereign Risk in Central America

Quarterly Report by the Executive Secretary of the Central American Monetary Council, June 2009.

Wednesday, July 8, 2009

General Situation
During the first months of the year, there has been a deterioration in some economic indicators like foreign investment, remittances and external trade. Based on this, the Executive Secretary estimates that the consequences of the international crisis were felt the most in the CA-RD region in the first third of the year, situation that could worsen further in the coming months, depending on what happens in the international stage.

This deterioration, together with a drop in tax collection caused by a fall in output in levels not seen before, has forced some governments to embark on important efforts to obtain fresh resources to cover their budgets, as they also review subsidies, tax exception, and pension programs, or do a tighter control of economic activities that did not pay taxes before.

¿Busca soluciones de inteligencia comercial para su empresa?

More on this topic

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+'.

Slight Improvement in Honduras' Country Risk

May 2015

Basing its decision on the progress being made in the economy in fiscal matters, Moody's has raised the outlook rating from positive to stable.

From the press release by Moodys:

New York, May 11, 2015 -- Moody's Investors Service has today revised the outlook on Honduras' government bond ratings to positive from stable.

Fitch Upgrades Ccsta Rica to 'BB+'

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.

Quarterly Country Risk Report: June 2010

July 2010

Central American countries still need to improve their economic performance to reach investment grade ratings.

On its Quarterly Country Risk report for June 2010, the Central American Monetary Council (SECMCA), notes that Moody’s Investor Service improved the foreign currency risk ratings for Guatemala and Nicaragua.