A statement from the Ministry of Economy and Finance reads:
Standard & Poor's upgrades Panama’s credit rating
We expect GDP growth to remain strong in the short term, driven by high and diversified investment in the country. "
The rating agency Standard & Poor's today upgraded the credit rating for debt in the medium and long term of the Republic of Panama, from BBB-to BBB with a stable outlook.
This positive effect on Panama’s risk rating has been presented after the annual visit to the country during the month of May, where the information necessary needed to determine the country's ability to cope with its debt covenants was collected from the hand of government representatives, private business and opposition parties.
"The stable outlook supports our view that Panama’s growth projections and fiscal flexibility are strong to meet any challenges that might emerge in the transition to a less optimistic economic environment."
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Standard & Poor’s rated Panama as investment grade; Fitch did the same two months ago.
The risk rating agency raised Panama's long-term foreign- and local-currency sovereign credit ratings to “BBB-” from “BB+”.
"The upgrade reflects our assessment that continued economic growth--combined with moderate fiscal deficits--should reduce the government's debt burden and maintain its financial profile comfortably in line with that of other sovereigns in the 'BBB' rating category," said S&P credit analyst Roberto Sifon-Arevalo. The outlook on Panama is stable.
Moody's Investors Service on Wednesday upgraded Panama's sovereign ratings to investment grade of Baa3 from Ba1.
The change is based on a significant improvement in the country's fiscal and debt positions.
"The anticipated positive impact of fiscal policy initiatives on government accounts and prospects for sustained economic growth are at the core of the upgrade," said Alessandra Alecci, Moody's vice president and senior analyst. "The Panama Canal expansion and an ambitious infrastructure investment program are likely to support strong economic growth in the next few years, boding well for debt dynamics," added Alecci. The outlook is stable.
Fitch downgraded Mexico's Issuer Default Rating (IDR) from 'BBB+' to 'BBB' in foreign currency and from 'A-' to 'BBB+' in domestic currency.
Both ratings have a 'Stable' outlook. Additionally, the country's ceiling was reduced to 'A-' from 'A'.
Fitch downgraded Mexico's ratings because the country's fiscal situation has gotten worse with the financial crisis and a reduction in Mexican oil production.
Standard & Poor's today affirmed its 'BBB-/A-3' long- and short-term sovereign credit ratings on the Republic of Panama and revised the outlook to positive from stable.
•Panama's GDP growth continues to perform better than expected and we think it will likely remain strong over the medium term.•Although the government faces challenges in implementing large infrastructure projects, the country's debt burden has continued to decline.