Fitch affirms Guatemala

Fitch Ratings said it affirmed Guatemala's local- and foreign-currency issuer default ratings at BB+, the short-term rating at B and the country ceiling at BBB-.

The outlook is stable.

Guatemala's low external and public debt burdens, the government's track record of fiscal discipline and moderate inflation, as well as a solid commercial debt repayment history support the country's ratings, Fitch said.

"Thus far, the authorities have appropriately managed recent bank interventions, minimizing fiscal slippage and increases in indebtedness, an important factor underpinning Guatemala's current credit ratings," Theresa Paiz Fredel, senior director for Latin American sovereign ratings, said in a written statement.

But high levels of poverty and inequality, and the country's poor social indicators, will constrain Guatemala's ratings to below investment grade for some time, the agency said, with the current policy framework vulnerable to eroding public support. Guatemala also has a persistent current account deficit, which has been covered by mostly private sector debt inflows, and has had recent problems with the financial sector, Fitch said.

© 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.