For Fitch, the delay in vaccination campaigns constitutes a latent risk of a prolonged pandemic, which would delay the recovery of the region's economies and would cause negative pressures on the risk ratings to be issued in the coming months.
Fitch Ratings issued a bulletin for Mexico, Central America and the Caribbean on May 25, in which it warned that given the deep economic contractions in the region and the moderate recovery outlook, there are threats of negative rating pressures.
After the multi-sector dialogue in Costa Rica was concluded, the main risk qualifiers agree that because the agreements signed to reduce the deficit are not enough, the government should execute its fiscal policies in a timely manner.
Although Costa Rica's fiscal situation was already precarious before the health and economic crisis that led to the covid-19 outbreak began, the scenario started to worsen since March of this year.
After the Alvarado administration agreed to backtrack on the proposal to negotiate a $1.75 billion loan with the IMF, it is predicted that next year the government will depend on domestic debt to finance its expenditures.
Fitch Ratings agreed to change the perspective of the region's banks from stable to negative, arguing that the current health crisis will affect financial institutions in all countries.
Considering the measures that countries have adopted in the last 15 days in economic matters, following the spread of covid-19, Fitch expects that there will be a decrease in the issuance of loans.
Except for Nicaragua, which projects a decline in revenues, Fitch Ratings estimates that by year-end the region's insurance markets will have grown from 3% to 8%.
According to the report Perspectives of Insurance Industry in Central America, prepared by the rating agency Fitch Ratings, El Salvador will be the market that in 2019 will register more dynamism in the region, reporting an 8% increase over revenues reported in 2018.
As a response to Giammattei's triumph, the rating agency maintained Guatemala's debt rating at BB with a negative outlook, warning of the difficulties the new president will face in governing without a legislative majority.
The triumph of the candidate of the VAMOS party did not surprise the analysts of the rating agency Fitch Ratings, for whom the political and fiscal scenario of the coming months will be the same as it has been seen so far.
The Legislative Assembly approved in first debate the issuance of $1.5 billion in debt securities in the international market, which in the opinion of the rating agencies, helps to reduce uncertainty about the government's ability to meet its financing needs.
The Treasury Department's initial plan was to issue $6 billion within six years, however, the committee in charge of the file modified the text so that the limit would be $1.5 billion.
Although poor social indicators and a low tax burden are a threat to the country's progress, for Fitch the Guatemalan economy has the capacity to overcome external adversities.
After the last visit of Fitch Ratings to Guatemala, representatives of the rating agency expressed the opinion that health, education and security indicators, together with the tax situation, are issues that should concern the country.
The governments of Costa Rica and Nicaragua will face greater challenges in obtaining financing in external markets, because of the lowering of their risk ratings by international agencies.
Arguing that Costa Rica reflects consistently large fiscal deficits, short-term financing needs because of a strong repayment schedule and budget financing constraints, Fitch Ratings reported on January 15 that the country's long-term foreign currency issuer default rating was downgraded from BB to B+.
Fitch Ratings forecasts that the insurance sector in Central America will close 2018 with a year-on-year increase of almost 6% and expects that in 2019 the business will reach a very similar growth rate.
The projected increase for 2018 and 2019 would be based on the behavior of the Panama, Costa Rica and Guatemala markets, however, the increases of 5.8% and 6.1% forecast for 2018 and 2019, respectively, would represent a slowdown regarding the 8.2% growth registered in 2017.
After Costa Rica's Constitutional Chamber prepared the path for tax reform in the Congress, the dollar's price against the local currency stopped rising, and positive reactions were reported in the risk outlook.
Last November 23rd, Court IV issued its judgment, so the law project has a free way to move forward more quickly during the coming weeks in the Congress.
Fitch Ratings reported that the country is under observation and for now maintains the rating at BB, awaiting what happens with the fiscal reform and the payment of government debt at the end of the year.
Fitch Ratings, a U.S. risk rating agency, reported on November 15th that Costa Rica would be close to a sovereign rating downgrade because of the country's public finances situation.
In the view of Moody's, Fitch and S & P, the latest projections of public debt and fiscal deficit by the Central Bank of Costa Rica, further worsen the outlook for the debt rating.
Last week the Central Bank of Costa Rica (BCCR) released a report in which it explained that for this year it is expected that the public debt with respect to the Gross Domestic Product (GDP) will reach 53.8%, and by 2019 this indicator will reach 58.4%.
More expensive external credit, deterioration of the country's image, and higher local interest rates are just some of the consequences that could result from the non-payment of $55 million to pension funds.
The decision taken by the Sánchez Cerén administration not to pay interest to pension funds on the grounds of lack of support from the opposition political party has caused not only a down grading of the debt rating by agencies such as Fitch Ratings and Standard & Poor's, but has also led the business sector to raise its voice about the seriousness of the situation and to warn about possible consequences on economic activity.
Fitch Ratings has upgraded from negative to stable the outlook on the issuance of $650 million made in 2013, after another $575 million was successfully issued a few days ago.
In its statement, the rating agency noted that sanctions imposed by the Office for Assets Control of the United States Department of the Treasury on companies that are part of Grupo Waked Internacional (Wisa), for allegedly operating a money laundering scheme, will not have a material impact on the Tocumen's credit rating.