Fitch lowers Ecuador view to negative

Fitch Ratings said it affirmed Ecuador's long-term foreign-currency issuer default rating at B and revised the outlook to negative from stable.

The ratings on Ecuador's senior unsecured foreign-currency bonds also were affirmed at B, along with the country ceiling at B and short-term foreign-currency issuer default rating at B.

The growth and fiscal outlook in Ecuador has deteriorated since the last agency review in October 2015 due to lower oil prices and higher financing needs, Fitch said.

The economy has entered into recession in 2016 with an expected contraction of 2%, followed by only a modest uptick in growth in 2017, the agency said.

In spite of expenditure containment efforts and new tax revenue measures, the sharp drop in revenues, rising interest payments and current expenditure rigidity will result in continued high non-financial public sector deficits of 5.7% of GDP in 2016, up from 5.2% in 2015, Fitch said.

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