Political Risk Latin America Blog @PolRiskLatam

Seven Latam countries on track to have credit ratings upgraded

Posted in News and Articles, Political Risk by politicalrisklatam on February 25, 2011

by Merco Press News, February 25th, 2011.

Seven countries in Latin America are on track to have their ratings upgraded in the short term, as the region’s credit cycle remains supported by healthy economic growth and greater policy stability, Fitch Ratings said on Thursday.

Countries such as Brazil, Colombia, the Dominican Republic, Panama, Peru, Suriname, and Uruguay all have a positive rating outlook from Fitch, although it’s not clear which of them could be upgraded this year, the agency said in a report.

“Fitch expects sovereign credit trends to remain positive in Latin America in 2011,” Fitch’s analysts Shelly Shetty and Erich Arispe said in the report.

The upgrade of Chile’s foreign-currency ratings to A-plus earlier this month was an early sign of that positive trend, they added.

Latin America’s credit cycle is underpinned by continued growth dynamism in most of the region, which is expected to grow 4.1% this year, down from an estimated 5.6% in 2010, Fitch said.

Risks to Fitch’s positive outlook come mostly from abroad, with possible weakness in U.S. and Chinese external demand. Lower commodity prices resulting from lower growth in the world’s largest economies could derail improvements in fiscal and external indicators of Latin American countries, Fitch said. (continue reading… )


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