Moody’s Ratings has raised El Salvador’s credit rating from Caa1 to B3, marking the third positive upgrade for the country in 2024. This improvement highlights the successful implementation of the government’s security strategy, effective liability management operations, and the appointment of technocrats to key positions in the economic sector.
In its press release, Moody’s stated that the rating upgrade reflects El Salvador’s progress in reducing external debt obligations and improving liquidity, which has alleviated short-term financial pressures. The agency noted that fiscal consolidation measures and structural improvements in the security climate have contributed to increased growth prospects and stronger investor sentiment.
“The rating upgrade reflects a material decrease in payment risk and a more stable fiscal outlook for the country,” Moody’s said. The agency also emphasized that the appointment of qualified technocrats in economic institutions has led to more consistent economic policies, further boosting investor confidence.
This upgrade is seen as a positive step for El Salvador’s economy. According to Exor Latin America, the improved rating allows the country to access financing at lower interest rates, which will help reduce debt costs and attract more investment. The financial services firm also highlighted that such upgrades typically have a positive impact on bond prices, as markets respond favorably to improvements in a country’s credit profile.
Carmen Aída Muñoz, executive director of the American Chamber of Commerce of El Salvador (AmCham), welcomed the rating boost, noting that it strengthens investor confidence in the country’s economic stability. “El Salvador is opening up to the world,” Muñoz said, “The first bet was on security, and now we’re demonstrating our commitment to economic stability.”
Finance Minister Jerson Posada also praised the rating upgrade as a recognition of the government’s fiscal reforms and efforts to improve security. “This reflects a government committed to the stability, growth, and well-being of the Salvadoran people,” he said.
The Moody’s upgrade is another indication of El Salvador’s positive economic trajectory, reinforcing the country’s efforts to improve both security and fiscal management as it positions itself for future growth.