Moody's downgrades El Salvador´s Debt Rating
Moody's downgraded the rating to "Ba2" from "Ba1", citing a continued deterioration of the country's financial condition.
Thursday, March 24, 2011
In a statement the rating agency stated, "The metrics for sustainability of government debt (including debt to income ratio) are not consistent with a grade of 'Ba1' in light of the limited prospects for growth the country has," Yahoo News published.
In all three countries, public finances have deteriorated due to higher fiscal deficits generated by increased government spending.
Standard & Poor's placed has set El Salvador’s risk rating as ‘negative outlook’, indicating deterioration in the investment climate and growth of the fiscal deficit.
The agency has affirmed the international rating of Guatemala as 'BB +' with Stable Outlook.
The government's inability to stop the growth of debt in the context of low economic growth and a high fiscal deficit is the reason for the reduction in the rating.
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