Moody’s lifts Honduras view to positive

Moody’s Investors Service said it revised the outlook on Honduras’ government bond ratings to positive from stable.

Moody’s also affirmed the foreign- and local-currency government’s issuer ratings and senior unsecured ratings at B3.

The outlook revision reflects expectations for continued progress toward fiscal consolidation targets by the government, building on the fiscal deficit narrowing to 4.4% of GDP in 2014, the agency said.

The positive outlook also considers an expectation of continued commitment to fiscal- and structural-reforms set out in the December 2014 IMF agreement, Moody’s said, along with a reduction of government liquidity risks.

The ratings also take into account Honduras’ trajectory of high fiscal deficits and rising debt ratios, weak economic strength given the small size of the economy and low income per capita and very low institutional strength, the agency said.

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