Fitch affirms Ecuador rating

Fitch Ratings said it affirmed Ecuador's long-term foreign currency sovereign rating at CCC+; the short-term foreign currency rating was affirmed at C.

The outlook is stable.

Fitch said that in spite of increases in economic growth and public sector revenues related to higher oil production, fiscal and external liquidity remains very tight in Ecuador. Given its lack of access to capital markets and limits to multilateral financing now that the IMF program has expired, the central government faces a financing gap this year of 0.9% of GDP. For lack of alternatives, the government will have to tap new oil revenues meant to be used for net debt repurchases and also the social security fund in order to meet its financing needs this year.

Should the central government deficit exceed the expected 1.6% of GDP level, added pressure on fiscal balances could force payment arrears. Scheduled bond interest is equal to about 2% of GDP, more than half of which is on externally issued bonds.

The government is currently in arrears on certain salary payments and to suppliers; there have been arrears to Paris Club creditors within the last year.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.