The agency maintains the B- rating for the country with a “stable” outlook as it is confident the country will get external support in 2021.
Standard & Poor’s risk rating confirmed on Thursday that it maintains the B- rating with a stable outlook for the country because it has expectations that “El Salvador will continue to receive significant external support in 2021 that will provide liquidity and limit the risk of refinancing sovereign debt in the next 12-18 months.
However the qualifier warned that it could downgrade this rating in the next 12 months if it faces difficulties in accessing financing from official creditors and international markets “and does not implement corrective tax actions, which in turn could stress the local market conditions, ”the statement said.
“We could also lower the sovereign rating if the economic recovery is delayed, which would affect long-term GDP growth and keep fiscal deficits high for longer than we currently expect,” the US agency said. .
Bukele government is negotiating an agreement with the International Monetary Fund
And conversely, in an optimistic scenario the agency says it could say it could raise ratings over the next 12 to 18 months if the economic recovery is more vigorous than expected and translates into stronger fiscal and external results, which would foretell a substantial decrease in the debt load.
“We expect the government to make gradual progress in implementing its plans to boost economic growth and strengthen public finances,” the document released today.
The considerations of the risk rating agency are given in the midst of the confirmation of the Government that it has initiated talks with the International Monetary Fund (IMF) with which it would seek funding for at least $ 1.3 billion and a series of fiscal measures that they would allow him greater confidence in other economic institutions.