RIO DE JANEIRO, BRAZIL – International credit rating agency S&P Global Ratings affirmed Ecuador’s long-term and short-term sovereign ratings at ‘B-‘ and ‘B,’ respectively.
The outlook is stable, “reflecting our view that the economic recovery, together with the ongoing implementation of the International Monetary Fund (IMF) program, will reduce the government’s financing needs,” the agency said in an Aug. 31, 2021 press release.
The outlook also includes continued progress in negotiations to revise the IMF’s Extended Fund Facility mechanism.
The agency estimates that proceeding with the agreement should help strengthen Ecuador’s economy, ensure sufficient financing, support international reserves for the next 12 months, gradually narrow the large financing gap, stabilize the debt burden, and solidify investor confidence.
According to S&P Global Ratings, the effective implementation of the IMF program would help the country regain access to international debt markets.
However, the rating agency pointed out that implementation of the policy “would be hampered by weak support in the National Assembly and social tensions due to the deep economic recession.”