Fitch downgrades El Salvador

Fitch Ratings said it downgraded El Salvador’s long-term foreign- and local-currency issuer default ratings to B+ from BB-.

Fitch also said it downgraded the issue ratings on El Salvador’s senior unsecured foreign-and local-currency bonds to B+ from BB-.

The outlook also was revised to stable from negative.

Fitch also said it downgraded El Salvador’s country ceiling to BB from BB+ and affirmed the short-term foreign-currency issuer default rating at B.

The downgrades are driven by the rising debt burden and growth underperformance relative to peers, the agency said.

Political polarization, prolonged periods of congressional gridlock and weak business confidence continue to hinder progress on reforms to arrest the deterioration of public finances and improve the business environment, Fitch added.

There is uncertainty on the timing and effectiveness of the country’s fiscal consolidation strategy, the agency said.

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