Thanks to the payment of bonds at the beginning of the year, El Salvador has achieved the “CCC+” rating on Fitch Rating. The same rating house explained that its expectations have been exceeded by the measures that the Government has taken to meet its debt obligations, which means that the probabilities of default are non-existent.
According to the authorities, the fiscal measures and bond payments have improved the country’s position and a good trend is anticipated.
One of these measures applied is the reduction of the fiscal deficit, taking it up to 2.5% of GDP in 2022, compared to the years 2020 (10.1%) and 2021 (5.5%), which translates into a constant work of solid collection of taxes and a committed reduction of expenses.
Likewise, the repurchase of sovereign bonds stands out, which has also been classified as a resounding success, since a reduction of the outstanding debt from $800 million to $348 million was achieved. Added to this, the Government of El Salvador reached 75.9% in the debt of the non-financial public sector, compared to 88.1% in 2020 and 80.4% in 2021.
According to Fitch, the projections for El Salvador are very good, since a downward trend in public debt/GDP is expected and a continuation of the good course for fiscal consolidation.
The country, under the leadership of President Nayib Bukele, continues to achieve results never seen before in past administrations.