NEW YORK, April 23 (Fitch) Colombia's creditworthiness is on
trajectory, according to a new Fitch Ratings report. In addition
a sound macroeconomic performance and stability, the sovereign
strengthened its external and fiscal balance sheets. Based on
improvements, Fitch revised the Rating Outlook on the
foreign currency Issuer Default Rating to Positive from Stable
'External accounts have strengthened through international
and improvements in fiscal policy are consistent with fiscal
consolidation and a
declining debt burden,' said Erich Arispe, Director in Fitch's
Rising international reserve levels and the fact that Colombia
will turn into a
net sovereign external creditor this year further increase its
The government's debt burden continues to decline below the
'BBB' median. The
smaller interest burden and increased capital spending reflect
trend in the composition of public spending, while the recently
reform highlights the commitment of the government to improving
the structure of
the cumbersome tax code.
Currency appreciation, increased commodity dependence,
and maintaining macroeconomic and financial stability represent
Colombia. The credibility and flexibility of its monetary policy
as well as
progress in reducing the structural constraints on the economy
could support the
authorities' efforts to reduce risks to macroeconomic and
and achieve higher growth.
While there has been a positive trend in Colombia's fiscal and
over the recent past, these still do not stand out as strengths
commodity exporters within the 'BBB' rating category. In
addition, the country's
still low revenue base restricts the pace of fiscal
consolidation and limits the
sovereign's fiscal flexibility.
Other structural weaknesses, such as a low GDP per capita,
weaker-than-investment-grade governance indicators and limited
continue to represent challenges for the country.
Fitch's special report 'Colombia Consolidates Its Investment
Grade Status' is
available at 'www.fitchratings.com'.
Fitch Ratings, Inc.
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New York, NY 10004
Media Relations: Elizabeth Fogerty, New York, Tel: +1 (212) 908
Additional information is available at www.fitchratings.com.
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