S&P lowers El Salvador foreign currency rating to B+

Standard & Poor’s said it lowered its long-term foreign currency rating on the Republic of El Salvador to B+/B from BB-/B. The outlook on the long-term rating is stable.

S&P also affirmed its AAA transfer and convertibility assessment for El Salvador.

The downgrade reflects a continued, gradual erosion of the government’s financial profile due to a combination of persistently low economic growth and elevated fiscal deficits, which result in large part due to shortfalls in the country’s pension system. The resulting steady increase in the government’s debt burden raises its vulnerability to potential adverse external shocks, S&P said in a news release.

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