Andean Group - May 2012 (ISSN 1741-4466)

Credit upgrade: On 18 May the international credit ratings agency Standard & Poor’s raised the long-term sovereign rating on Bolivia to 'BB-' from 'B+', with the outlook stable. According to the S&P statement, the upgrade reflects “the improvement in the government's debt burden coupled with the country's strengthened external indicators - one of the strongest among its 'BB' rated peers.” The statement notes that “the general government debt burden fell to 31% of GDP in 2011 from 36% of GDP in 2010 due in part to the government's low fiscal deficit and high nominal GDP growth”. It also highlights that in 2011, the general government balance recorded a deficit of 1.1% of GDP with “strong fiscal revenue flows from both high prices on hydrocarbons and the higher tax burden on foreign companies operating in the sector underpinning Bolivia's strong fiscal performance during the past five years”. In 2012, S&P expects that the general government will post a similar deficit of almost 1% of GDP- despite higher government revenues due to increased public spending”.

End of preview - This article contains approximately 307 words.

Subscribers: Log in now to read the full article

Not a Subscriber?

Choose from one of the following options

• Subscribe
• Sign up for a one-time, 14-day trial