By Daniel Bases
April 19 Standard & Poor's on Friday revised
down its sovereign credit outlook on Venezuela to negative from
stable, citing the close presidential election, questions about
the vote's legitimacy and the increase in political uncertainty.
The current B-plus rating of the OPEC-member nation of 29
million people was affirmed, S&P said in a statement.
"The outlook revision reflects growing political uncertainty
that could weaken the implementation of economic policies and
possibly undermine governability following the presidential
elections of April 14," the firm said.
Nicolas Maduro, a bus driver-turned-foreign minister who
became the late Hugo Chavez's chosen successor, was sworn in as
the new president on Friday. He narrowly beat opposition
challenger Henrique Capriles in a vote last Sunday.
Capriles insists opposition figures show he won the
election. Official figures say he got 49 percent of the ballots
versus 50.8 for Maduro.
"The negative outlook signals the possibility that a
politically weakened president and administration may pursue
less pragmatic, more interventionist policies that increase
imbalances in the economy and result in greater instability. We
could lower the rating by one notch under such a scenario," S&P
Venezuelans vote electronically, but the machines also print
out paper receipts of each vote that are kept in boxes. A
decision to widen an electronic audit of the vote took some heat
out of the dispute over the poll.
Capriles accepted the National Electoral Council's decision,
although it fell short of the manual recount he had wanted.
"The election results add to the already high level of
unpredictability that characterizes Venezuela's economic policy
and its legal and policy framework, which constrain the
sovereign credit rating," S&P said.
"The country's vast oil and gas reserves, the government's
relatively low debt burden, and its net external asset position
continue to support the rating," the statement said.
Venezuela is rated B-plus with a negative outlook by Fitch
Ratings while Moody's Investors Service is one notch higher at
B2, also with a negative outlook.