Fitch keeps the rating of Salvadoran debt ‘CCC’

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By LatAm Reports Editor

The agency warned of an accelerated increase in debt interest, as well as a financing gap of 13.4 percent of GDP by 2024.

This article has been translated from the original which first appeered in El Mundo SV

The Fitch Ratings agency announced Tuesday that it maintains El Salvador’s credit rating in ‘CCC’, a note that is limited by the high public debt and the recent history of non-compliances related to pension commitments.

Fitch allocated the note in ‘CCC’ in May 2023, a group for economies or companies with substantial credit risk and a real possibility of non-compliance. For sovereigns with notes in ‘CCC’ or below, the agency does not give perspective.

The agency explained that the rating is supported by greater human development compared to the countries of the region and a history of relative macroeconomic stability thanks to dollarization.

However, the rating is conditioned by the high public debt, a recent “story of non-compliance with local pension-related debt,” a persistent fiscal deficit and limited financing capacity. The agency also influences the decline in governance indicators.