Fitch revises Laos outlook to negative

Fitch Ratings said it revised the outlook to negative from stable and affirmed Laos’ Long-Term Foreign-Currency Issuer Default Rating at B-.

“The negative outlook reflects the economic and financial-market effects of the coronavirus shock, which have compounded Laos’ external financing risks associated with its forthcoming external debt maturities and low foreign-exchange buffers. Public finances will also deteriorate from a combination of slower nominal GDP growth, fiscal relief measures and restrictions to contain the pandemic,” Fitch said in a press release.

The country has about $900 million in public external debt-service payments due over the rest of the year, which includes about $250 million of baht-denominated debt, Fitch said. At the end of March, Laos had about $1 billion in foreign exchange reserves.

“The capacity to roll over or refinance upcoming maturities over the next few months will be an important indicator of the authorities' ability to meet their financing obligations during the remainder of the year,” the agency said.

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