Multilateral Institutions Celebrate El Salvador’s Credit Rating Upgrade.

El Salvador’s recent three-notch credit rating upgrade by risk rating agency Fitch Ratings has been positively received by multilateral institutions and government officials. The country’s credit rating rose from CC in February to CCC+ on Thursday.

Dante Mossi, President of the Central American Integration Bank (BCIE), congratulated the country on the improved rating, stating on social media, “We are very pleased to see these improvements in El Salvador’s international ratings! Keep going!”

Óscar Avalle, representative of the Development Bank of Latin America (CAF) in El Salvador, also congratulated the country on its credit rating upgrade.

In its report, Fitch highlights that the rating improvement is due in large part to the government’s timely payment of the 2023 bond with interest, as well as the successful debt repurchase operations. The agency also notes that another default event “no longer seems likely.”

César Addario, Vice President of Exor Latin America, a financial services firm, commented that this news could mark the beginning of a process of rating upgrades for the country.

“We at Exor trust that this will be a positive initial step and that El Salvador will enter into an upward spiral in its ratings process with risk rating agencies, as this directly impacts the cost of money for the country as well as access to money in the market,” he said.

The positive reactions to the Salvadoran economy’s latest progress in the risk rating ecosystem were joined by William Soriano, Secretary of the Finance Committee of the Legislative Assembly.

“President Nayib Bukele lowered the debt of the non-financial public sector by 12%. The fiscal deficit decreased by 7.6%. He paid off the debt of ARENA and FMLN in advance. All of this, while facing a pandemic, a global economic crisis, a war against gangs, and a huge public investment in education, health, and public works,” the politician said.

“As Secretary of the Finance Committee, I thank the BCIE and Luis Rodríguez (Director of the multilateral for the country) for their support in El Salvador’s fiscal consolidation and public investment,” he added.

Luis Rodríguez thanked Deputy Soriano, stating that the country is not alone in facing its economic challenges and confirming the financial institution’s support for the country.

“As we said even in the Assembly, if someone thinks that our country will be alone in its moments of crisis or great challenges, they are totally mistaken. We at BCIE accompany and will continue to accompany our people,” he said.