RTTNews - Moody's Investors Service in a report Wednesday said Colombia's Ba1 foreign currency government bond rating was supported by relative stability in macro-economic policy, an impeccable debt-service track record and financial backing from the U.S. At the same time, the firm said it was not seeing a meaningful decline in the country's debt burden in the coming year.
Colombia is proving to be more resilient to the global financial crisis than originally anticipated, Alessandra Alecci, Moody's Vice-President/Senior Analyst, and author of the report said. Financing has been available in both the domestic and external markets, even at the height of the crisis, she added.
Meanwhile, the firm pointed out that the constraints to the rating include structural challenges to the fiscal position in light of increasing inflexibility in expenditures and a narrow revenue base.
Alecci pointed out that a possible upgrade in the rating movement would require a careful assessment of how Colombia emerges from the crisis and whether the expected fiscal deterioration can be reversed through a meaningful rebound in growth, committed policy efforts, or both.
Moreover, the analyst noted that, barring negative developments, higher debt levels could still be consistent with positive rating actions if accompanied by improved fiscal fundamentals.
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