LatinNews Daily - 07 October 2020

* International credit ratings agency Fitch Ratings has warned that implementing in full the 2021 national budget proposed by El Salvador’s government would “increase pressure on El Salvador's 'B-' sovereign rating from deteriorating debt sustainability metrics and financing constraints”. In a press release, Fitch highlights that the 2021 budget proposal calls for a 16% increase in spending compared with the 2020 budget, adding that “this would imply a 7.5% of GDP fiscal deficit, debt-to-GDP of 94%, and financing needs of nearly US$1.85bn”, which Fitch believes would be challenging to meet. Fitch notes that El Salvador's opposition-controlled national legislature is unlikely to pass the proposal, but emphasised that “short-term borrowing has already hit record levels, and the approach of next year's legislative elections may complicate efforts to secure additional multilateral support”.Fitch forecasts that El Salvador’s GDP will contract by 8.2% in 2020, and expects its fiscal deficit to come in at 11% of GDP, up from 3.1% in 2019. It also notes that revenues fell by nearly 10% year-on-year in the first seven months of 2020, while spending was up 26% in the same period. 

End of preview - This article contains approximately 197 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