UPDATE 1-Fitch upgrades Colombia credit rating to BBB, outlook stable
By Daniel Bases
NEW YORK Dec 10 (Reuters) - Fitch Ratings on Tuesday upgraded Colombia's foreign currency sovereign credit rating to BBB from BBB-minus, citing improving debt dynamics and "credible and consistent" policies.
The outlook on the credit was revised to stable from positive following the overall upgrade.
"Colombia's medium-term growth prospects remain favorable compared with several of its rating peers and should be supportive of fiscal performance," Fitch said in a statement.
Fitch's move on Colombia brings it in line with Standard & Poor's BBB rating with a stable outlook while Moody's Investors Service rates the Andean nation one notch lower at Baa3 with a positive outlook. Colombia is rated investment grade by all three agencies.
Colombia's economic growth, Fitch said, could reach 3.8 percent this year, which it describes as below potential. However, the firm said the government has managed to "contain pressures on its fiscal accounts."
"Moreover, the current administration's reforms to strengthen public finances such as the fiscal sustainability law and the fiscal rule reduce the risk of fiscal policy slippage over the forecast period," the firm said.
Economic growth in the second quarter of this year rose 2.2 percent.
Fitch highlighted that Colombia's general government debt of 37.1 percent of gross domestic product remains below its peers and is forecast to steadily decline.
Colombian President Juan Manuel Santos has pursued a peace process with Marxist FARC (Revolutionary Armed Forces of Colombia) rebels where talks are underway in Cuba.
In Havana, government mediators are working through a five-point agenda with some three dozen rebel leaders, seeking to stop the bloodshed that has left more than 200,000 people dead since it began in 1964.
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