Moody's: Colombia rating reflects growth

Moody's Investors Service said in its annual report on Colombia that the country's Ba1 foreign currency government bond rating reflects the potential for continued strong growth, policy predictability, a strong debt service track record and support from the United States.

Among the key constraints identified in the report are challenges to the fiscal consolidation in place since 2003, particularly in light of increasing inflexibility in expenditures and a structural central government deficit of around 5.0% of GDP, the agency said.

In addition, Colombia's external imbalance and its growing dependence on trade with Venezuela underscore the vulnerability to a turn in the commodity cycle and lack of diversification, Moody's noted.

"Over the past few years, the combination of extremely positive debt dynamics, skillful liability management and ample global appetite for emerging market risk has led to considerable improvements in Colombia's debt profile, thus lowering refinancing risk," said Moody's vice president and senior analyst Alessandra Alecci, author of the report.

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