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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.
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Title Annotation:EL SALVADOR
Publication:Caribbean Update
Geographic Code:2ELSA
Date:Aug 31, 2012
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