LatinNews Daily - 22 October 2021

In brief: S&P revises El Salvador outlook to ‘negative’

* International credit ratings agency S&P Ratings has revised its outlook on El Salvador to negative from stable and re-affirmed its ‘B-/B’ sovereign credit rating. In a statement, S&P explained that this revision was due to El Salvador’s potential financing risks, with fiscal deficit and debt set to remain high despite a strong economic recovery and thus increasing financing needs. Among other things, S&P cites the Salvadorean government’s elevated short-term debt and the need to secure funding for an US$800m external bond due in January 2023. The ratings agency has noted that its revised outlook means there is a one in three chance of a downgrade in the next six to 18 months “if the government does not make adequate progress filling its substantial financing gap in the coming year”.

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