S&P lowers Venezuela outlook to stable

Standard & Poor's said it revised its outlook on the Bolivarian Republic of Venezuela to stable from positive and affirmed its long-term BB- sovereign currency ratings on the country.

The agency said that the outlook revision comes after the inauguration of President Hugo Chavez and the swearing-in of his new cabinet at which time he announced sweeping plans to establish greater government control over the economy, including the nationalization of telecommunications and power companies and a constitutional amendment to strip the Central Bank of its autonomy.

This is a signal that the country risk, already higher than sovereign risk, is set to increase further, according to S&P, which added that the overall investment climate in Venezuela has clearly deteriorated in the past six years with increased government intervention in the private sector.

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