Uruguay’s Ministry of Economy and Finance announced that the country had received the highest credit rating in its history after Japanese rating agency R&I raised the South American country’s foreign currency sovereign debt rating to BBB+ from BBB.
The rating from companies such as R&I is used to show the level of risk associated with lending to governments, depending on the economic conditions of the countries.
R&I, the rating agency, said in a statement that it had upgraded the country’s rating because the “reforms the current government is working on in several areas will boost economic growth while maintaining the stability of the financial system.”
La calificadora R&I subió la nota de la deuda soberana uruguaya en moneda extranjera a BBB+ desde BBB, con perspectiva estable. De esta manera, Uruguay logra la más alta calificación crediticia en su historia.
— Economía y Finanzas (@mef_Uruguay) October 21, 2022
R&I noted, “Uruguay’s political and social stability is among the highest in South America.”
More than 90% of domestic energy production comes from renewable sources. The government is focusing on measures to reduce environmental impact, such as revising the tax system and developing green hydrogen, which aims to reduce greenhouse gas emissions.
As a country with strengths in natural resources such as tourism, agribusiness, and forestry, the growing global awareness of the need to reduce environmental impact is a tailwind for Uruguay.
The rating agency also notes that the negative impact of the COVID-19 pandemic on Uruguay’s fiscal position was less than expected.