Fitch downgrades El Salvador

Fitch Ratings said it downgraded El Salvador's long-term foreign- and local-currency issuer default ratings to B from B+.

The outlook also was revised to negative from stable.

The ratings on El Salvador's senior unsecured foreign- and local-currency bonds also were downgraded to B, along with its country ceiling to BB- from BB.

The short-term foreign-currency issuer default rating also was affirmed at B.

The downgrades reflect El Salvador's continuing high level of political polarization with a prolonged period of congressional gridlock, Fitch said.

This severely limited the government's financing options and hindered meaningful fiscal measures to halt the deterioration of public finances, the agency said.

The negative outlook considers the persisting risks for El Salvador to meet financing needs for 2017 in the absence of a political agreement that unlocks additional external borrowing, Fitch said.

The agency also said that El Salvador's GDP growth remains low compared to its peers with five-year average GDP growth at just 2%.

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