Fitch lowers rating.
FITCH LOWERS RATING. The rating agency Fitch Ratings said July 24
it has downgraded the economic perspective of the rating, making it
negative outlook BB from Stable. Long-Term Ratings (IDR) in foreign
currency and local currency 'BB'; - Short-term rating
'B'; - Country Ceiling: 'BBB-'. The revision of the
outlook reflects the continued low economic growth performance of El
Salvador in relation to its peers, which is expected to continue over
the forecast period due to structural impediments faced by the economy.
Large fiscal deficits and the difficulty in consolidating fiscal
accounts have quickly produced a burden of debt persistently above 50%
of GDP, well above the average for 'BB'. This restricts the
ability of government policy to respond to external and domestic shocks.
In Fitch's view, global economic uncertainty poses risks for
additional unfavorable economic and fiscal projections for El Salvador.
The prospects for economic growth in El Salvador are weaker than those
of most of its peers in the light of the country's low level of
competitiveness and low investment and high crime rates. Government
initiatives to accelerate growth and improve the business climate have
been slow to materialize.