Fitch Ratings has upgraded Colombia to “investment status” thanks in part to achievements from President Juan Manuel Santos, the credit ratings firm announced Wednesday.
“Colombia’s upgrade to investment grade is supported by its track record of prudent economic policies, demonstrated resilience to external and domestic shocks, as well as the improvement in its external credit metrics,” stated the release, which commends President Juan Manuel Santos’ government for its agenda to “bolster the credibility and predictability of public finances and enhance the country’s growth trajectory.”
The ratings system upgraded Colombia’s status from “positive” to “stable” with a Issuer Default Rating (IDR) change from “BB+” to “BBB-.”
Financial analysts predict the country’s five year growth average to be 4.2% in 2011 which is above the BBB (investment grade status) median of 3.1%.
At 22.5% of the nation’s GDP, Colombia has an external debt level “lower than its peers,” stated the report.
Recently approved congressional reforms also brighten the outlook of Colombia’s economic investment future, according to Fitch.
“The Fiscal Sustainability Reform provides the government with the legal tools to manage expenditure pressures, while the Fiscal Rule and Reform to the Royalty System could prove to be useful mechanisms both to increase the counter-cyclical capacity of the general government as well as provide a credible path toward fiscal consolidation,” stated the ratings agency.
Of the other “Big Three” international credit ratings agencies, Standards & Poor gave Colombia the same BBB- rating in March while Moody’s currently qualifies the Andean nation at Ba1 status, one step below investment grade.