S&P upgrades Paraguay

Standard & Poor’s said it raised the long-term foreign- and local-currency sovereign credit ratings on the Republic of Paraguay to BB from BB-.

The agency also said it affirmed the short-term foreign- and local-currency sovereign credit ratings at B.

The outlook is stable.

S&P also said it raised the T&C assessment to BB+ from BB.

The upgrades are based on an expectation that the government will make progress in implementing recent legislation designed to boost investment and maintain cautious macroeconomic policies, the agency said.

The president’s administration has embarked on an ambitious plan to spur investment, especially in the country’s physical infrastructure, in order to build and sustain long-term GDP growth and modernize the economy, S&P said.

The ratings also reflect the country’s limited monetary flexibility, low per capita income and shortfalls in physical infrastructure, the agency said, and its still-evolving political and public institutions.

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