ColombiaOne.comColombia newsFitch Maintains BB+ Rating for Colombia

Fitch Maintains BB+ Rating for Colombia

-

Credit rating agency Fitch maintains a BB+ sovereign rating for Colombia, with a forecast of a stable economic situation and an inflation rate of 9% by the end of this year.

On Friday, June 30, the long-term sovereign debt rating for the country was unchanged at BB+, with a report on economic stability. Fitch also announced a significant slowdown in economic growth of 1.5% due to the delayed effects of monetary policy tightening, among other factors.

Lower inflation forecasts

Additionally, Fitch announced an inflation rate of around 9% by the end of 2023, and up to 5% by the end of 2024, returning to a figure similar to the one recorded in 2021. This is good news as it would provide significant relief from one of the main macroeconomic factors that directly affects citizens: rising prices.

In a global context of inflation, Colombia experienced an inflation rate of 13.12% for the previous year, a figure not seen in the country since 1999.

Government celebrates the decision

Finance Minister Ricardo Bonilla highlighted Fitch’s information and stated that it is mainly due to “the country’s good track record in terms of macroeconomic and financial stability, the independence of the central bank, the inflation targeting regime and free floating currency.”

Bonilla emphasized Colombia’s history of debt repayment and its good performance in meeting its obligations, which has a positive effect on the country’s credit behavior. Finally, the minister reaffirmed the country’s willingness to honor those commitments.

Warning about high deficits and political instability

Finally, the world’s third-largest credit rating agency warned that Colombia continues to maintain excessively high deficits. However, it acknowledged the efforts to reduce these imbalances.

According to Fitch, debt and interest rates remain high, with accounts too dependent on commodities such as oil. Political instability also merited mention, as although the new government initially formed a significant coalition, recent reform proposals encountered “obstacles” and were withdrawn.


See all the latest news from Colombia and the world at ColombiaOne.com. Contact our newsroom to report an update or send your story, photos and videos. Follow Colombia One on Google News, Facebook, Instagram, and subscribe here to our newsletter.

THE LATEST IN YOUR INBOX!