Moody's upgrades Paraguay

Moody's Investors Service said it upgraded Paraguay's government bond rating by one notch to Ba2 from Ba3 and changed the outlook to positive from stable.

The agency said the upgrade was driven by the improving standing of Paraguay's key fiscal metrics relative to Ba peer medians, a strengthened institutional framework as a result of the legislation package that was approved last year and a smooth political transition since the impeachment of former president Fernando Lugo in 2012.

The positive outlook reflects Moody's expectation that, even though it will take time for the government to implement the various laws approved in late 2013, they are likely to improve fiscal oversight and allow for higher levels of infrastructure investment over the medium to long term.

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