NEW YORK Aug 22 Fitch Ratings on Thursday
revised its sovereign credit outlook on Aruba to negative from
stable citing a sluggish economy, large fiscal imbalances,
rising government debt and increased vulnerability because of a
halt in fuel exports.
The Caribbean nation's investment grade BBB credit rating
was affirmed, Fitch said.
Valero Energy Corp idled its refinery on the island
because of the high cost of running the facility.
"The growth and external forecasts assume that refining
operations and fuel exports by Valero will remain suspended
during 2013 - 2015. However, the company will continue to be a
provider of transshipment services during this period," Fitch
Standard & Poor's has Aruba one notch higher at BBB-plus
with a stable outlook.
The global financial crisis and suspension of operations at
the Valero refinery have led to a cumulative 12 percent
shrinkage of Aruba's economy between 2008 and 2012, Fitch said.
"Downside risks to growth remain depending on the tourism
sector performance and the execution of large public-private
partnerships to transform the infrastructure network and energy
matrix of the island," Fitch said.
"Aruba's 'BBB' ratings are supported by its impeccable debt
repayment record, high per capita income, strong rule of law,
political and social stability," Fitch said in its statement.