Fitch Ratings affirms its ratings for El Salvador as follows:

– Long-Term Ratings (IDR) in foreign currency and local currency ‘BB’;
– Short-term rating ‘B’;
– Country Ceiling: ‘BBB-‘.

The Rating Outlook has been revised to Negative from Stable.

The revision of the outlook reflects the continued low economic growth performance of El Salvador in relation to its peers, which is expected to continue over the forecast period due to structural impediments faced by the economy. Large fiscal deficits and the difficulty in consolidating fiscal accounts have quickly produced a burden of debt persistently above 50% of GDP, well above the average for ‘BB’.

This restricts the ability of government policy to respond to external and domestic shocks. In Fitch’s view, global economic uncertainty poses risks for additional unfavourable economic and fiscal projections for El Salvador.

The prospects for economic growth in El Salvador are weaker than those of most of its peers in the light of the country’s low level of competitiveness and low investment and high crime rates. Government initiatives to accelerate growth and improve the business climate have been slow to materialize.

Source: Fitch Ratings (PDF)