Rating Outlook And Trends

The average credit quality in Latin America and Americas island nations has recovered to pre-pandemic levels, mainly because we've raised ratings at the lower range of the ratings scale among smaller economies. As a result, there has been increasing convergence between simple average and GDP weighted average ratings.

The distance between these metrics was almost a full notch in the decade prior to 2020, but it has narrowed to one-third of a notch in 2023 and 2024 (see chart 1). This narrowing may continue, as the number of positive outlooks in the Americas, mainly in small Caribbean and Central American countries, is at its highest since 2011.

Average ratings in Latin America and Americas island nations have remained around 'BB' this year, slightly improving from September 2023. Average creditworthiness in the Americas continent, including the large economies of Canada and the U.S., is close to 'BB+', and the GDP-weighted average is slightly above 'AA-', reflecting the significant weight of these two North American sovereigns on the continent's overall credit quality.

So far in 2024, we have raised the sovereign ratings on Paraguay and Argentina and lowered the sovereign ratings on Peru.

The rating composition of the region has improved over the last year, in line with its relative credit quality recovery, especially in speculative-grade sovereigns. In the Americas, there are currently 17 sovereigns rated below 'BBB-', but since year-end 2020, the distribution of these ratings has shifted upward.

The number of sovereigns rated in the 'B' category or below fell to nine as of June 2024, from 11 in December 2020, while the number of sovereigns in the 'BB' category rose to eight from six. Also, the 'CCC and below' rating category is at its lowest since 2020, and there are no sovereigns in the 'SD' (selective default) category.

S&P Global Ratings rates 14 of the 31 sovereigns in the Americas 'BBB-' or higher, placing them in the investment-grade category (see chart 2). This is the second lowest rate compared to other regions--just above emerging markets in Europe, the Middle East, and Asia. The region's highest-rated sovereign is Canada ('AAA'), followed by the U.S. ('AA+').

Among the remaining sovereigns, the highest rated are Bermuda ('A+'), the Falkland Islands ('A+'), and Chile ('A'). The lowest rated are Argentina ('CCC'), Bolivia ('CCC+'), and Suriname ('CCC+'). The rating category with the largest numbers of sovereigns remains the 'BBB' category, with nine entities.

Rating Actions In 2024

In the first half of 2024, we lowered the long-term foreign currency ratings on one sovereign and raised the ratings on two:

• In February, we raised the ratings on Paraguay to 'BB+' from 'BB'.
• In March, we raised the ratings on Argentina to 'CCC' from 'CCC-'.
• In April, we lowered the ratings on Peru to 'BBB-' from 'BBB'.

In addition, we revised the outlooks on Aruba, Guatemala, and Turks and Caicos to positive from stable. As a result, there are now four sovereigns in the region with a positive outlook (the fourth is Barbados). We also revised the outlooks on Colombia and Ecuador to negative from stable. Other sovereigns in the Americas with negative outlooks are Bolivia, Chile, and Panama.

We maintain stable outlooks on 71% of the long-term ratings on sovereigns in the Americas. Investment-grade sovereigns with stable outlooks include Bermuda, Canada, Curacao, the Falkland Islands, Mexico, Montserrat, Peru, Trinidad and Tobago, the U.S., and Uruguay.

Table 1

Latin America and The Caribbean sovereign rating--Strengths and weaknesses
Issuer	Sovereign foreign currency ratings	Institutional assessment	Economic assessment	External assessment	Fiscal assessment, budget performance	Fiscal assessment, debt	Monetary assessment
Argentina	CCC/Stable/C	6	5	6	6	5	6
Aruba	BBB/Positive/A-2	2	4§	4	1§	4	4
Bahamas	B+/Stable/B	4	4	6	4	6	4
Barbados	B-/Positive/B	5	4	6	4	6	5
Belize	B-/Stable/B	6	6	6	6	5	5
Bermuda	A+/Stable/A-1	2	2	3	1	4	5
Bolivia	CCC+/Negative/C	5	6	6	6	5	5
Brazil	BB/Stable/B	4	5	2	6	6	3
Canada	AAA/Stable/A-1+	1	1	2	1	3	1
Chile	A/Negative/A-1	2	4	4	3	2	2
Colombia	BB+/Negative/B	3	4	5	4	4	3
Costa Rica	BB-/Stable/B	4	4	4	5	6	4
Curacao	BBB-/Stable/A-3	3	5	2	2	1	5
Dominican Republic	BB/Stable/B	4	3	4	5	5	4
Ecuador	B-/Negative/B	6	5	6	4	3	6
El Salvador	B-/Stable/B	6	5	5	6	6	6
Falkland Islands	A+/Stable/A-1	3	2	4	1	1	6
Guatemala	BB/Positive/B	4	5	2	3§	3§	4
Honduras	BB-/Stable/B	5	5	2	5	4	4
Jamaica	BB-/Stable/B	4	6	4	1	5	4
Mexico	BBB/Stable/A-2	3	5	2	4*	4	3
Montserrat	BBB-/Stable/A-3	2	5	3	4	1	5
Nicaragua	B/Stable/B	5	5	5	4	2	5
Panama	BBB/Negative/A-2	3	2	5	3	4	5
Paraguay	BB+/Stable/B	4	4§	2	3	3	5
Peru	BBB-/Stable/A-3	4	4	3	2	3	3
Suriname	CCC+/Stable/C	6	6	6	6	6	6
Trinidad and Tobago	BBB-/Stable/A-3	3	4	3	3	4	4
Turks and Caicos	BBB+/Positive/A-2	2	4	3§	1	1	6
U.S.	AA+/Stable/A-1+	2*	1	2	5	6	1
Uruguay	BBB+/Stable/A-2	3	3	2	5	3	5
1 (%)		3.2	6.5	0.0	19.4	12.9	6.5
2 (%)		19.4	9.7	29.0	6.5	6.5	3.2
3 (%)		22.6	6.5	16.1	16.1	19.4	12.9
4 (%)		25.8	32.3	19.4	22.6	22.6	25.8
5 (%)		12.9	32.3	12.9	16.1	16.1	32.3
6 (%)		16.1	12.9	22.6	19.4	22.6	19.4
Median		4.0	4.5	4.0	4.0	4.0	4.5
Mean		3.8	4.2	3.9	3.7	4.0	4.3
Standard deviation		1.4	1.4	1.6	1.8	1.7	1.4
*Deterioration since December 2023. §Improvement since December 2023.

Table 2

Americas--Economic outlook
	Real GDP growth (%)		GG balance / GDP (%)		Net GG debt / GDP (%)		Current account balance / GDP (%)		Narrow net ext. debt / CAR (%)
	2024e	2025e	2024e	2025e	2024e	2025e	2024e	2025e	2024e	2025e
Argentina	-3.48	3.26	-1.00	-1.00	85.50	63.56	0.61	0.53	218.90	200.23
Aruba	1.00	0.50	2.52	1.89	40.17	38.00	7.84	8.15	0.59	2.56
Bahamas	1.80	1.50	-1.97	-1.45	71.42	70.07	-6.60	-5.40	52.64	50.01
Barbados	2.20	2.00	-1.10	-0.40	101.61	97.72	-5.34	-4.97	58.42	61.12
Belize	3.00	2.50	-3.20	-3.00	59.18	59.33	-3.53	-3.76	66.87	67.88
Bermuda	3.00	1.10	0.00	0.10	4.38	3.79	10.84	11.00	-67.56	-68.83
Bolivia	1.90	1.90	-5.50	-5.00	66.53	70.69	-2.25	-1.84	96.82	110.59
Brazil	2.03	1.98	-5.90	-5.60	60.43	63.47	-2.02	-1.32	0.80	-2.20
Canada	1.13	1.66	-1.65	-1.45	48.07	47.95	-0.90	-1.10	101.07	103.90
Chile	2.41	2.56	-1.90	-1.30	32.91	33.44	-4.20	-4.01	91.73	90.74
Colombia	1.07	2.76	-5.60	-4.70	55.55	56.85	-2.82	-3.54	118.95	120.74
Costa Rica	3.30	3.30	-3.30	-3.30	60.56	61.13	-3.09	-3.36	27.33	26.84
Curacao	4.00	2.00	-0.21	-0.44	-28.11	-27.80	-22.26	-21.26	-52.62	-47.30
Dominican Republic	5.00	5.00	-3.81	-3.59	55.82	55.92	-3.25	-2.76	78.90	72.08
Ecuador	1.00	1.00	-2.70	-2.70	54.74	56.09	2.41	1.28	115.50	115.11
El Salvador	2.50	2.40	-4.39	-4.18	75.34	76.67	-2.39	-2.17	73.92	73.80
Falkland Islands	2.00	2.00	-11.86	-10.97	-143.59	-130.30	N/A	N/A	N/A	N/A
Guatemala	3.50	3.50	-0.10	-2.10	14.53	15.70	1.19	-0.41	-15.26	-15.13
Honduras	3.60	3.60	-2.32	-2.15	45.66	46.03	-2.87	-2.87	20.63	21.24
Jamaica	1.55	1.30	0.63	0.72	55.99	53.22	2.49	2.64	51.76	48.71
Mexico	2.16	1.74	-5.70	-4.20	49.46	51.48	-1.68	-2.09	27.58	27.93
Montserrat	3.50	2.00	0.00	0.00	-1.19	-0.85	-13.84	-12.11	-138.19	-136.22
Nicaragua	3.50	3.50	0.45	0.44	-9.33	-9.11	3.24	1.26	51.19	49.61
Panama	2.50	4.50	-3.68	-2.40	43.95	43.32	-4.79	-4.87	141.46	140.62
Paraguay	3.90	3.50	-2.60	-2.20	28.63	28.52	-0.88	-1.49	33.59	32.43
Peru	2.68	2.96	-2.70	-2.10	22.86	23.90	-0.26	-0.37	34.05	31.71
Suriname	3.00	3.00	-1.08	-0.83	77.75	70.71	-0.74	-0.01	48.84	51.36
Trinidad and Tobago	1.70	1.70	-1.95	-2.17	22.26	23.43	8.97	5.38	-29.37	-26.25
Turks and Caicos	4.80	4.70	1.21	1.30	-47.65	-45.51	24.85	23.80	-99.19	-96.26
United States	2.48	1.74	-6.15	-5.93	94.99	97.42	-3.37	-3.52	361.32	374.85
Uruguay	3.10	2.50	-3.40	-3.40	52.35	53.95	-1.51	-2.07	30.00	29.02
e--Estimate. GG--General government. CAR--Current account receipts. N/A--Not applicable.

Latin America And The Caribbean: Higher Debt And Modest GDP Growth

We expect moderate GDP growth (despite persistently high global interest rates) and subdued inflation in major Latin American economies, such as Brazil, Mexico, Colombia, Chile, and Peru. We believe the sovereign debt burden of much of the region will remain stable or increase slightly this year, despite the economic growth.

Across the Americas, the debt burden remains higher today than it was before the pandemic, including in the U.S. and Canada. Although GDP now exceeds its pre-pandemic level in most countries, GDP growth rates remain below pre-pandemic levels in many countries (especially in Colombia and Peru). Meanwhile, real wages have improved in many countries (notably in Chile and Mexico), and unemployment has typically declined to pre-pandemic levels.

We expect policy continuity after recent national elections in Mexico and the Dominican Republic, where the incumbent political parties won, as well as in Panama. Similarly, we anticipate stable economic policy in Uruguay after national elections scheduled in October.

Country Highlights In Latin America And The Caribbean

Argentina

The government aims to stabilize the economy with a substantial fiscal adjustment (relying mainly on spending cuts) that eliminates the government's dependence on the central bank to fund its deficits. The government also reduced the central bank's liabilities to strengthen the central bank's finances and monetary policy credibility.

In addition, the government devalued the currency, reducing the gap between the official and parallel exchange rates, while gaining approval from Congress for policies that, among other things, would deregulate the economy, stimulate private investment, and contribute to greater efficiency.

Monthly inflation has fallen below 5% in mid-2024 from over 25% in December 2023. However, the gap between the monthly inflation rate and the pre-announced devaluation of the currency (of 2% each month) foreshadows a real appreciation of the exchange rate.

A stronger exchange rate, combined with tight monetary policy and a likely fiscal surplus, may help contain inflation and set the stage for economic recovery later this year (we believe GDP may contract 3%-4% in 2024). However, a prolonged period of real appreciation could weaken investor sentiment and pose risks to financial market stability.

Brazil

Brazilian democracy has growing checks and balances, including an active judiciary, an independent central bank, and a divided but centrist Congress--characteristics that help to ensure continuity on key economic policies. Policymaking will continue to depend on pragmatic negotiation between the administration of center-left President Luiz Inacio Lula da Silva and several, mainly centrist, political parties in the powerful Congress.

Since gaining operational independence in 2021, Brazil's central bank has successfully withstood political pressure. The government will soon name a new governor to the central bank, who will take office next year. We expect the monetary authority to have continued autonomy, safeguarding technically driven policy to anchor inflation expectations at the central bank's target of 3%.

GDP growth is likely to slow toward 2% in 2024 after expanding nearly 3% last year. Many years of gradual reforms have helped to strengthen Brazil's trend growth rate, which may average 2% during 2024-2027. Nevertheless, we expect that net general government debt will rise toward 70% of GDP by 2027 from 57.1% of GDP in 2023, reflecting large fiscal deficits.

We expect only gradual fiscal correction. Recent heavy floods in the state of Rio Grande do Sul will add spending pressures and hurt government revenue in 2024. In addition, the federal government announced a spending freeze and may cut some other spending to reach zero deficit target for its primary balance.

Colombia

We expect GDP growth will just exceed 1% in 2024 and exceed 2% next year, marking relatively weak economic performance in a country that has typically grown faster than much of Latin America. The low growth rate, with investment (unlike GDP) still below pre-pandemic levels, partly reflects subdued private-sector confidence.

The central government aims for its headline deficit to rise to 5.6% of GDP in 2024, driven by revenue shortfalls. The Colombian Congress recently passed an ambitious pension reform, extending coverage and enlarging the role of the public sector, one of the few major initiatives that President Gustavo Petro has been able to secure.

Petro's proposed reforms to health care and labor laws remain blocked in Congress. Our negative outlook upon the rating reflects the risk that economic growth could remain below our expectations, indicating less economic resilience and--absent corrective measures--contributing to fiscal slippage.

Mexico

Mexicans elected Claudia Sheinbaum as their next president and gave her political party, Morena, a solid majority in both chambers of Congress in June. President-elect Sheinbaum faces challenges in public finances, including a recently growing fiscal deficit and long-standing weaknesses in state-owned energy company Petroleos Mexicanos (Pemex).

The outgoing administration announced plans for a substantial fiscal correction in 2025, reducing the total public-sector borrowing requirement by nearly half. However, it remains to be seen whether the Sheinbaum administration will adhere to the path of fiscal correction when it presents its own budget for 2025.

GDP growth is likely to slow to just above 2% this year from 3.2% in 2023. Recent developments have raised hopes for sustained higher private-sector investment, including foreign direct investment, to build a larger supply chain to cater to North America and reduce reliance on China.

Some recent economic data, especially rising nonresidential construction, indicates growing investment prospects. However, many years of underinvestment, especially in infrastructure (such as energy and electricity), constrain the supply side of the economy. Poor physical infrastructure, water shortages in some areas, and capacity constraints on electricity limit Mexico's growth prospects.

We believe Mexico benefits from important checks and balances across branches of government, including the judiciary and monetary authority. Measures that weaken checks and balances could dampen private-investor confidence by creating perceptions of greater risk, potentially dampening economic growth and sovereign creditworthiness.

Panama

Panama's recently elected president, Raul Mulino, faces challenges to stabilize public finances, manage the fallout of the closure of a large mining project last year, and address growing water shortages that affect consumers and the Panama Canal. Mulino, who took office in July, inherits an economy that is likely to grow only 2%-3% in 2024 from 7.3% last year.

The mine's closure affects Panama's short-term GDP performance and, through the loss of expected fiscal revenue from the project, adds to existing fiscal challenges. We expect that GDP may grow 4% or higher in 2025-2027, considering Panama's diversified economy, its geographic location as a logistics hub, and a robust pipeline of private- and public-sector projects to help offset the short-term impact of the mining setback.

Long-term growth and fiscal revenue also depend on the ability of the Panama Canal Authority to address freshwater shortages and vulnerability to recurrent droughts or floods. Additionally, the configuration of the National Assembly, with independent candidates holding 30% of seats, may limit or slow Mulino's ability to pass major reforms.

Peru

In April, we lowered the long-term foreign currency rating on Peru to 'BBB-' due to political uncertainty that is constraining growth prospects. Persistent tension between the executive and legislative branches, coupled with fragmentation across the political spectrum (nearly 50 parties have registered to run in the national elections in 2026), have hurt investor sentiment and weigh on Peru's growth and investment prospects. We do not expect a material improvement in the country's fragmented politics until after the 2026 elections.

The economy returned to growth in April and may expand 2.7% after contracting 0.5% last year due to weather shocks and social protests. We expect continued macroeconomic stability thanks to cautious fiscal and monetary policies, with the fiscal deficit likely staying below 3% of GDP and inflation within the targets set by the country's autonomous central bank.

We expect the planned Latin American logistics hub Chancay port, a US$1.3 billion investment (in its first stage), to be operational by the end of 2024. The port, along with expected industrial development near it, could boost trade and GDP growth.

U.S. And Canada: Contrasting Politics And GDP Growth Performance

As shown in chart 5, the net general government debt burden (as a share of GDP) has risen in both Canada and the U.S. since the height of the pandemic, up 10 percentage points in Canada and 15 points in the U.S.

However, despite Canada's lower debt burden and weaker political polarization compared with the U.S., we expect Canada's GDP to grow only 1.1% in 2024, down from 1.3% in the previous year. In contrast, U.S. GDP growth is likely to remain 2.5% in 2024, as it was in 2023.

Country Highlights In The U.S. And Canada

Canada

We expect continuity in economic policies as Canada approaches national elections due by mid-2025. Canada's two dominant parties, Liberals and Conservatives, are together likely to again receive around two-thirds of the popular vote, as they have for many years.

This contrasts with other wealthy democracies where politics has become more fragmented, with the rise of new parties and less support for the two historically dominant parties (as in France, Germany, Spain).

U.S.

Politics remain highly polarized in the U.S. ahead of national elections in November. The Republican Party has undergone several years of internal churning and conflict that has gradually resulted in the adoption of new policies and shifted its voter base. The party now emphasizes cultural conservatism, economic nationalism, and populism, moving away from much of its traditional economic policy orientation.

Although the Democratic Party has been more stable, it is undergoing turmoil over its own political leadership, including its presidential candidate. Regardless of the outcome of the 2024 elections, the Democratic Party will likely also gradually shift its policy orientation and voter base.

The new administration and Congress will face fiscal challenges immediately after the elections. The government's debt ceiling, which was suspended in June of last year, will be reinstated on Jan. 2, 2025. Negotiations to raise the ceiling, or suspend it again, will likely again involve political brinksmanship. Political polarization has not yet weighed on U.S. economic growth, but it has contributed to loose fiscal policy (with the federal government deficit approaching 7% of GDP in fiscal year 2024).

Substantial tax cuts approved in 2017 under the Trump administration will expire in 2025, absent new legislation to extend or modify them. The resolution of the tax cuts will partly determine the ability of the government to moderate its fiscal deficits and contain the growth of debt, especially given added spending pressure in coming years from health care and pensions.

Sovereign Summaries

Argentina (CCC/Stable/C)

• Analyst: joydeep.mukherji@spglobal.com
• Latest publication: Argentina Long-Term Ratings Raised To 'CCC' As Debt Exchange Is Finalized; Outlook Stable, March 15, 2024

Rating score snapshot

• Institutional assessment: 6
• Economic assessment: 5
• External assessment: 6
• Fiscal assessment – flexibility and performance: 6
• Fiscal assessment – debt burden: 5
• Monetary assessment: 6

Outlook: Stable

The stable outlook on the long-term ratings balances the risks posed by pronounced economic imbalances and policy uncertainties with the favorable change in near-term debt service obligations. We also expect no further debt exchanges that we would likely consider to be distressed.

Downside scenario.  We could lower the ratings over the coming 12 months if negative policy or political developments undermine Argentina's limited access to financing. Failure to advance difficult fiscal, monetary, and other reforms could hurt access to funding, including from the Extended Fund Facility provided by the IMF, from other multilateral lending institutions, and from local investors. As a result, we could lower the ratings. In addition, at such low rating levels, we generally consider debt exchanges as distressed and tantamount to a default.

Upside scenario.  We could raise the ratings during the coming 12 months if we see successful execution of economic policies that continue to address Argentina's major structural macroeconomic imbalances, setting the stage for better fiscal outcomes, containment of high inflation, and a sustainable economic recovery. Under such a scenario, the government would enjoy better access to voluntary market funding.

Table 3

Argentina
	2018	2019	2020	2021	2022	2023	2024e	2025e	2026e	2027e
GDP per capita (in ‘000)	11.80	10.00	8.50	10.56	13.65	13.85	11.85	12.87	14.48	16.87
GDP growth	-2.62	-2.00	-9.90	10.44	5.27	-1.61	-3.48	3.26	2.19	2.50
GDP per capita growth	-3.60	-2.97	-10.77	9.40	4.30	-2.50	-4.44	2.24	1.18	1.48
Current account balance/GDP	-5.16	-0.78	0.70	1.37	-0.64	-3.24	0.61	0.53	0.38	0.29
Gross external financing needs/CAR&FXR	137.39	121.93	141.30	120.81	127.22	143.71	169.36	152.09	143.42	134.57
Narrow net external debt/CAR	210.41	230.71	274.47	203.20	167.59	222.22	218.90	200.23	180.14	157.63
GG balance/GDP	-5.65	-1.86	-7.71	-4.01	-2.61	-3.49	-1.00	-1.00	-1.00	-1.00
GG net debt/GDP	74.83	84.10	95.46	72.18	75.15	145.11	85.50	63.56	56.94	51.98
CPI inflation	34.29	53.55	42.01	48.42	72.38	133.49	250.01	95.04	52.49	40.01
Bank credit to resident private sector/GDP	14.49	11.48	11.85	9.84	9.09	9.78	9.78	9.78	9.78	9.78
e--Estimate.

Aruba (BBB/Positive/A-2)

• Analyst: Julia.smith@spglobal.com
• Latest publication: Aruba Outlook Revised To Positive From Stable On Stronger Economy; 'BBB' Rating Affirmed, March 19, 2024

Rating score snapshot

• Institutional assessment: 2
• Economic assessment: 4
• External assessment: 4
• Fiscal assessment – flexibility and performance: 1
• Fiscal assessment – debt burden: 4
• Monetary assessment: 4

Outlook: Positive

The positive outlook reflects a greater than one-in-three chance that we could raise the rating on Aruba over the next 12-24 months. We expect Aruba's economy will remain well above its pre-pandemic level throughout the forecast horizon and that the government will achieve fiscal surpluses, supporting an improvement in its net debt burden and a cooperative relationship with the Netherlands.

Downside scenario.  We could lower our ratings in the next two years if income per capita significantly deteriorates, or if the government reverses the progress it has made on fiscal performance, leading to persistently large government deficits, a higher debt burden, and rising debt costs. If the bilateral relationship between Aruba and the Netherlands were to weaken, signaling an erosion of institutional strength, we could lower the rating by one or more notches.

Upside scenario.  We could raise our ratings within the next two years if the government is able to demonstrate progress on its debt reduction and economic reform plans, which would lead to a strengthened balance sheet and a more resilient economy. This, together with a cooperative relationship with the Netherlands that supports debt sustainability and investor confidence, could lead us to raise our ratings.

Table 4

Aruba
	2018	2019	2020	2021	2022	2023	2024e	2025e	2026e	2027e
GDP per capita (in ‘000)	30.08	31.09	23.56	28.81	30.80	34.83	34.12	34.87	34.73	34.90
GDP growth	2.38	-2.31	-23.98	27.64	8.00	5.20	1.00	0.50	1.00	1.00
GDP per capita growth	2.20	-2.58	-23.56	28.71	8.40	3.24	-2.13	0.20	-1.85	-0.98
Current account balance/GDP	-0.72	0.44	-15.86	-0.66	6.90	5.68	7.84	8.15	8.46	8.77
Gross external financing needs/CAR&FXR	110.30	108.00	140.05	113.32	112.24	105.39	101.71	100.08	101.19	99.57
Narrow net external debt/CAR	-1.29	-1.13	6.83	-4.26	-1.96	-1.35	0.59	2.56	4.47	5.68
GG balance/GDP	-0.31	4.63	-14.41	-5.07	-4.10	7.93	2.52	1.89	1.86	1.77
GG net debt/GDP	35.85	32.89	58.50	55.25	55.25	42.40	40.17	38.00	35.87	33.82
CPI inflation	3.63	3.60	-3.00	3.60	5.77	2.26	0.10	2.00	1.50	1.50
Bank credit to resident private sector/GDP	55.97	58.79	79.29	63.73	60.88	60.88	60.88	60.88	60.88	60.88
e--Estimate.

The Bahamas (B+/Stable/B)

• Analyst: Julia.smith@spglobal.com
• Latest publication: (Full Analysis) The Commonwealth of The Bahamas, Sept. 18, 2023

Rating score snapshot

• Institutional assessment: 4
• Economic assessment: 4
• External assessment: 6
• Fiscal assessment – flexibility and performance: 4
• Fiscal assessment – debt burden: 6
• Monetary assessment: 4

Outlook: Stable

The stable outlook reflects our view that economic growth will support government revenues and help contain government expenditures, leading to smaller fiscal deficits over the next 12 months. We expect the domestic market and multilateral lenders will meet the country's relatively large financing needs.

Downside scenario.  We could lower the ratings in the next 12 months should economic performance lag, pointing to GDP per capita remaining below our expectations. We could also lower the ratings if the sovereign's access to external liquidity were to deteriorate unexpectedly.

Upside scenario.  We could raise the ratings in the next 12 months if the government advances faster than we expect to enact meaningful public finance reform, demonstrating an ability to raise revenues and leading to sustained near-balanced financial results and improved economic prospects.

(Latest research update published on Nov. 22, 2022)

Table 5

Bahamas
	2018	2019	2020	2021	2022	2023	2024e	2025e	2026e	2027e
GDP per capita (in ‘000)	32.71	33.42	25.32	29.23	33.34	35.93	36.95	37.72	38.66	39.63
GDP growth	2.63	-1.36	-21.42	15.40	10.78	2.64	1.80	1.50	1.50	1.50
GDP per capita growth	1.60	-2.33	-22.18	16.66	9.38	1.32	0.49	0.20	0.20	0.20
Current account balance/GDP	-9.51	-2.16	-22.94	-21.41	-9.05	-7.49	-6.60	-5.40	-4.05	-2.73
Gross external financing needs/CAR&FXR	263.75	207.98	519.10	340.54	238.29	228.67	210.29	213.26	205.85	198.85
Narrow net external debt/CAR	40.13	22.12	126.86	68.79	47.44	47.59	52.64	50.01	47.50	45.12
GG balance/GDP	-1.80	-6.53	-15.21	-6.96	-4.59	-1.88	-1.97	-1.45	-1.44	-1.42
GG net debt/GDP	47.76	47.27	80.94	78.97	76.09	72.62	71.42	70.07	68.49	66.96
CPI inflation	2.27	2.49	0.04	2.90	5.61	3.05	2.40	1.90	2.33	2.33
Bank credit to resident private sector/GDP	49.63	47.79	59.35	51.02	45.44	42.23	40.86	39.84	38.68	37.56
e--Estimate.

Barbados (B-/Positive/B)

• Analyst: jennifer.love@spglobal.com
• Latest publication: Barbados Outlook Revised To Positive On Stronger Economy; 'B-' Rating Affirmed, Oct. 26, 2023

Rating score snapshot

• Institutional assessment: 5
• Economic assessment: 4
• External assessment: 6
• Fiscal assessment – flexibility and performance: 4
• Fiscal assessment – debt burden: 6
• Monetary assessment: 5

Outlook: Positive

The positive outlook reflects S&P Global Ratings' view that Barbados will continue its progress on institutional reforms supporting sustainable public finances and balanced economic growth. Although we expect institutional strengthening will take time, we believe pension reforms will take place in the next year, which could improve our fiscal assessment of Barbados. The outlook also incorporates our expectations of slowing global growth and higher interest rates.

Downside scenario.  We could lower our ratings in the next year if the impact of external conditions leads to larger fiscal deficits than we expect, and we believe that the government would not have sufficient funding to meet its fiscal or external financing needs.

Upside scenario.  We could raise our ratings in the next year if pension reforms and institutional strengthening lead to better sustainability of the country's pension system and our fiscal assessment improves. We could also raise the ratings if continued improvement in government policymaking contributes to improved GDP growth prospects and stronger public finances.

Table 6

Barbados
	2018	2019	2020	2021	2022	2023	2024e	2025e	2026e	2027e
GDP per capita (in ‘000)	17.89	18.70	16.63	17.19	20.27	22.14	23.45	24.53	25.49	26.49
GDP growth	-0.70	0.30	-12.70	-1.30	13.80	4.40	2.20	2.00	2.00	2.00
GDP per capita growth	-0.84	0.17	-12.81	-1.42	13.66	4.27	2.08	1.88	1.88	1.88
Current account balance/GDP	-4.36	-2.64	-5.91	-10.97	-10.71	-8.92	-5.34	-4.97	-4.93	-4.73
Gross external financing needs/CAR&FXR	236.48	199.11	276.81	225.12	213.62	199.91	165.83	184.69	190.98	210.48
Narrow net external debt/CAR	84.25	67.65	91.51	89.21	72.96	71.12	58.42	61.12	62.60	66.47
GG balance/GDP	-0.30	3.58	-4.49	-4.96	-2.10	-1.77	-1.10	-0.40	0.00	0.00
GG net debt/GDP	114.67	107.59	122.95	128.36	113.79	106.31	101.61	97.72	94.17	90.70
CPI inflation	3.67	4.10	0.50	1.60	4.90	5.00	3.74	2.71	2.00	2.00
Bank credit to resident private sector/GDP	83.77	80.20	89.35	86.20	75.74	71.02	68.21	66.82	64.23	61.73
e--Estimate.

Belize (B-/Stable/B)

• Analyst: fernanda.nieto@spglobal.com
• Latest publication: (Full Analysis) Belize, Aug. 24, 2023

Rating score snapshot

• Institutional assessment: 6
• Economic assessment: 6
• External assessment: 6
• Fiscal assessment – flexibility and performance: 6
• Fiscal assessment – debt burden: 5
• Monetary assessment: 5

Outlook: Stable

The stable outlook reflects our expectation that the economy will continue recovering even amid high inflation, weak external liquidity, and risks related to high government debt. We expect the government to continue making gradual progress towards strengthening public finances in the next 12 months.

Downside scenario.  We could lower the ratings in the next six to 18 months if adverse developments elevate fiscal and external imbalances beyond our expectations or hamper access to official lending. Failure to capitalize on the fiscal benefits of the sovereign debt restructuring, combined with poor external liquidity and a still high debt burden, could eventually weaken the government's liquidity and lead to a downgrade.

Upside scenario.  We could raise the ratings over the next six to 18 months if we see a track record of stronger economic and fiscal results coupled with a sustainable improvement in external liquidity. Successful implementation of fiscal measures that results in consistent debt reduction and better GDP growth and long-term economic prospects could lead to an upgrade.

(Latest research update published on Aug. 19, 2022)

Table 7

Belize
	2018	2019	2020	2021	2022	2023	2024e	2025e	2026e	2027e
GDP per capita (in ‘000)	5.85	5.92	4.86	5.61	6.36	6.72	6.98	7.15	7.26	7.39
GDP growth	1.12	4.49	-13.39	15.21	9.74	4.66	3.00	2.50	2.00	2.00
GDP per capita growth	-0.92	1.27	-16.06	12.26	6.71	1.68	0.39	-0.10	-0.58	-0.58
Current account balance/GDP	-6.82	-7.64	-6.25	-6.51	-8.29	-3.68	-3.53	-3.76	-3.80	-2.84
Gross external financing needs/CAR&FXR	136.75	134.64	151.44	143.81	138.79	136.24	142.54	144.01	144.76	142.64
Narrow net external debt/CAR	78.32	80.67	122.92	75.37	59.90	59.77	66.87	67.88	69.06	68.50
GG balance/GDP	-0.86	-3.70	-8.86	0.39	-0.78	-1.60	-3.20	-3.00	-3.00	-3.00
GG net debt/GDP	71.20	70.18	91.31	70.01	62.77	59.62	59.18	59.33	59.91	60.17
CPI inflation	0.30	0.20	0.10	3.22	6.30	6.30	3.40	2.50	2.20	2.30
Bank credit to resident private sector/GDP	44.76	45.29	55.07	47.70	42.73	41.68	40.70	40.29	40.20	53.79
e--Estimate.

Bermuda (A+/Stable/A-1)

• Analyst: jennifer.love@spglobal.com
• Latest publication: (Full Analysis) Bermuda, May 7, 2024

Rating score snapshot

• Institutional assessment: 2
• Economic assessment: 2
• External assessment: 3
• Fiscal assessment – flexibility and performance: 1
• Fiscal assessment – debt burden: 4
• Monetary assessment: 5

Outlook: Stable

The stable outlook reflects our expectation that the local economy will remain healthy, and support solid government finances and low debt, as well as Bermuda's external asset position. We believe continued growth will support a balanced budget in line with the government's expectation this year. We assume a commitment to fiscal consolidation will lead to balanced budgets and a slight decrease in net general government debt over the next three years.

Downside scenario.  Unexpected weakness in Bermuda's international financial services (IFS) sector due to shifts in the global insurance sector, material job losses tied to ongoing sector consolidation, or exogenous shocks could weaken the territory's external asset position, and its public finances. Our fiscal assessment would weaken if the government runs sustained deficits, amid a higher interest burden, or if the government's large liquid assets fall to less than 25% of GDP. Under either scenario, we could lower the rating within the next two years.

Upside scenario.  We could raise the rating if the territory posts more robust real GDP growth on a sustained basis, potentially through greater economic diversification. We could also raise the rating on improvements in Bermuda's debt profile, namely on a lower interest burden or less vulnerable composition of debt. However, we believe that such a scenario will likely take longer than our two-year outlook horizon.

(Latest research update published on Aug. 12, 2020)

Table 8

Bermuda
	2018	2019	2020	2021	2022	2023	2024e	2025e	2026e	2027e
GDP per capita (in ‘000)	112.28	117.45	105.43	111.57	118.96	127.89	135.05	138.97	143.61	147.92
GDP growth	-0.43	0.31	-6.84	5.42	6.43	4.00	3.00	1.10	1.13	1.10
GDP per capita growth	-0.43	0.32	-6.81	5.81	6.61	4.10	3.10	1.20	1.23	1.20
Current account balance/GDP	13.18	10.97	12.67	13.53	14.88	10.91	10.84	11.00	10.88	10.47
Gross external financing needs/CAR&FXR	319.28	208.87	225.29	189.25	172.98	175.14	172.38	170.45	170.09	170.50
Narrow net external debt/CAR	-57.34	-55.97	-83.22	-80.36	-58.52	-68.31	-67.56	-68.83	-71.79	-74.42
GG balance/GDP	-1.72	-4.61	-5.96	-3.50	-3.04	-0.50	0.00	0.10	0.25	0.30
GG net debt/GDP	0.56	1.43	3.11	4.66	7.07	4.55	4.38	3.79	3.05	2.42
CPI inflation	1.39	0.93	-0.02	1.52	3.89	3.39	2.50	1.70	2.10	1.80
Bank credit to resident private sector/GDP	110.34	116.43	128.05	122.77	119.43	104.71	99.73	97.48	94.89	92.66
e--Estimate.

Bolivia (CCC+/Negative/C)

• Analyst: santana.victor@spglobal.com
• Latest publication: Bolivia Long-Term Ratings Lowered To 'CCC+' From 'B-' On Heightened External Vulnerabilities; Outlook Negative, Nov. 22, 2023

Rating score snapshot

• Institutional assessment: 5
• Economic assessment: 6
• External assessment: 6
• Fiscal assessment – flexibility and performance: 6
• Fiscal assessment – debt burden: 5
• Monetary assessment: 5

Outlook: Negative

The negative outlook indicates the risk of further worsening of external liquidity, which could impair the government's ability to fully service its debt. Political disagreements, including within the governing coalition, have weakened the government's ability to secure external financing and stanch the erosion of its external profile.

Downside scenario.  We could lower the ratings over the next 12 months if we see greater risk to debt servicing. Continued political stalemate limits the government's ability to stabilize and reverse the decline in external liquidity that, if unchecked, could pose risks to economic and monetary stability. The government's commercial debt payments are low in the next 12 months, but further erosion in the availability of foreign exchange could hurt the economy and undermine the government's capacity to service its debt.

Upside scenario.  We could raise the ratings in the next 12 months if we see decisive policy measures that boost investor confidence and reverse recent worsening of the country's external profile. Among other things, this would include steps to gain better and timely access to external funding and to correct still-large fiscal deficits, along with greater transparency in key economic data.

Table 9

Bolivia
	2018	2019	2020	2021	2022	2023	2024e	2025e	2026e	2027e
GDP per capita (in ‘000)	3.55	3.55	3.14	3.41	3.67	3.71	3.56	3.30	3.17	3.11
GDP growth	4.22	2.22	-8.74	6.11	3.61	3.08	1.90	1.90	2.00	2.00
GDP per capita growth	2.65	0.80	-10.03	4.64	2.19	1.70	0.53	0.54	0.65	-0.33
Current account balance/GDP	-4.28	-3.34	-0.04	3.92	2.13	-2.76	-2.25	-1.84	-1.55	-2.03
Gross external financing needs/CAR&FXR	66.99	69.33	65.60	69.04	82.85	95.27	103.85	106.77	112.16	114.06
Narrow net external debt/CAR	-2.41	36.30	72.82	57.58	58.42	87.74	96.82	110.59	119.06	128.69
GG balance/GDP	-5.97	-6.91	-13.07	-8.46	-5.83	-5.90	-5.50	-5.00	-5.00	-4.50
GG net debt/GDP	24.78	28.96	45.95	52.22	55.17	59.68	66.53	70.69	74.67	75.97
CPI inflation	2.27	1.84	0.94	0.74	1.75	2.58	4.00	3.00	3.00	3.00
Bank credit to resident private sector/GDP	61.31	65.28	75.88	71.54	70.87	68.91	68.94	68.97	68.93	68.22
e--Estimate.

Brazil (BB/Stable/B)

• Analyst: manuel.orozco@spglobal.com
• Latest publication: (Full Analysis) Brazil, June 11, 2024

Rating score snapshot

• Institutional assessment: 4
• Economic assessment: 5
• External assessment: 2
• Fiscal assessment – flexibility and performance: 6
• Fiscal assessment – debt burden: 6
• Monetary assessment: 3

Outlook: Stable

The stable outlook reflects S&P Global Ratings' expectation that Brazil will maintain a strong external position, thanks to strong commodity output and limited external financing needs. We also believe Brazil's institutional framework can sustain stable and pragmatic policymaking based on extensive checks and balances across the executive, legislative, and judicial branches of government. We expect a very gradual fiscal correction but anticipate fiscal deficits will remain large.

Downside scenario.  We could lower our ratings within the next two years if poor policy implementation leads to further fiscal deterioration and a higher-than-expected debt burden. A deterioration in policy signaling could also lower foreign direct investment inflows and, thereby, weaken Brazil's external position.

Upside scenario.  We could raise our ratings over the next two years if benefits from the now extensive set of structural and microeconomic reforms improve Brazil's long-term growth trajectory. Faster-than-expected progress at addressing fiscal imbalances that stabilizes debt levels could also lead us to raise the ratings.

(Latest research update published on Dec. 19, 2023)

Table 10

Brazil
	2018	2019	2020	2021	2022	2023	2024e	2025e	2026e	2027e
GDP per capita (in ‘000)	9.12	8.85	6.92	7.79	9.06	10.04	10.39	10.79	11.23	11.77
GDP growth	1.78	1.22	-3.28	4.76	3.02	2.91	2.03	1.98	2.08	2.23
GDP per capita growth	0.98	0.45	-3.92	4.21	2.54	2.38	1.46	1.44	1.56	1.71
Current account balance/GDP	-2.86	-3.63	-1.91	-2.77	-2.47	-1.31	-2.02	-1.32	-1.39	-1.53
Gross external financing needs/CAR&FXR	67.43	70.49	65.87	71.60	74.41	74.67	76.94	74.08	75.36	76.97
Narrow net external debt/CAR	-9.22	-6.46	-11.54	-0.55	5.98	7.35	0.80	-2.20	-5.25	-7.04
GG balance/GDP	-6.90	-4.92	-11.75	-2.24	-3.53	-7.50	-5.90	-5.60	-5.80	-5.80
GG net debt/GDP	56.41	54.36	66.67	56.11	51.42	57.07	60.43	63.47	66.61	69.51
CPI inflation	3.66	3.74	3.21	8.29	9.34	4.60	4.17	3.82	3.52	3.52
Bank credit to resident private sector/GDP	46.61	47.04	52.85	51.95	53.19	53.26	54.13	55.21	56.43	57.58
e--Estimate.

Canada (AAA/Stable/A-1+)

• Analyst: Julia.Smith@spglobal.com
• Latest publication: (Full Analysis) Canada, April 25, 2024

Rating score snapshot

• Institutional assessment: 1
• Economic assessment: 1
• External assessment: 2
• Fiscal assessment – flexibility and performance: 1
• Fiscal Assessment – debt burden: 3
• Monetary assessment: 1

Outlook: Stable

The stable outlook reflects S&P Global Ratings' view that Canada's high wealth levels, diversified economy, fiscal and monetary buffers, and strong external profile underpin creditworthiness and leave the country well positioned to face unforeseen economic shocks.

Downside scenario.  We could lower the ratings over the next two years if Canada's fiscal or debt position weakened substantially, absent policy signals from the government about future corrective actions and was accompanied by unexpected poor economic performance. We could also lower the ratings should a much weaker fiscal position occur in tandem with a substantial and sustained deterioration in Canada's net external position, increasing external vulnerabilities.

(Latest research update published on April 28, 2022)

Table 11

Canada
	2018	2019	2020	2021	2022	2023	2024e	2025e	2026e	2027e
GDP per capita (in ‘000)	46.54	46.35	43.54	52.50	55.51	53.43	54.31	57.06	60.57	62.76
GDP growth	2.74	1.91	-5.04	5.29	3.82	1.25	1.13	1.66	2.11	1.99
GDP per capita growth	1.28	0.43	-6.06	4.71	1.96	-1.68	-0.07	0.65	1.40	1.28
Current account balance/GDP	-2.38	-1.95	-2.02	0.01	-0.37	-0.73	-0.90	-1.10	-1.04	-0.93
Gross external financing needs/CAR&FXR	150.91	154.91	177.20	189.40	182.05	174.24	192.41	171.00	173.27	181.66
Narrow net external debt/CAR	115.26	116.06	126.40	100.59	88.48	89.64	101.07	103.90	107.20	111.06
GG balance/GDP	1.19	0.68	-10.80	-1.49	1.08	-0.10	-1.65	-1.45	-1.15	-0.90
GG net debt/GDP	40.30	38.64	53.27	50.28	48.95	47.75	48.07	47.95	47.32	46.52
CPI inflation	2.24	1.96	0.72	3.40	6.80	3.88	2.69	2.03	2.08	1.94
Bank credit to resident private sector/GDP	173.87	175.23	192.38	183.09	175.42	177.60	178.44	178.85	178.46	178.28
e--Estimate.

Chile (A/Negative/A-1)

• Analyst: constanza.perez.aquino@spglobal.com
• Latest publication: Chile Outlook Revised To Negative On Weaker Political Consensus; 'A/A-1' Foreign Currency Ratings Affirmed, Oct. 19, 2023

Rating score snapshot

• Institutional assessment: 2
• Economic assessment: 4
• External assessment: 4
• Fiscal assessment – flexibility and performance: 3
• Fiscal assessment – debt burden: 2
• Monetary assessment: 2

Outlook: Negative

Our negative outlook captures the risks stemming from weakening political consensus on the key parameters of Chile's political and economic agenda. In our view, these difficulties in pushing forward material pieces of legislation might translate over time into weaker economic performance and prospects, as well as slower improvement in social conditions. Moreover, structurally weaker growth will continue to pressure Chile's fiscal and external profiles.

Downside scenario.  We could lower our ratings on Chile over the next 24 months if, following the conclusion of the constitutional redrafting process, political impasses persist, preventing agreement on meaningful legislation to strengthen economic prospects and recover fiscal and external buffers. A downgrade could also result from fiscal deterioration from our base case, due to weak growth or quickly expansive fiscal policy that leads to a consistent and fast buildup of government indebtedness.

Upside scenario.  We could revise our outlook to stable over the next 24 months if Chilean institutions can take meaningful actions to reduce economic uncertainty, strengthen investment, and rebuild fiscal and external resilience.

Table 12

Chile
	2018	2019	2020	2021	2022	2023	2024e	2025e	2026e	2027e
GDP per capita (in ‘000)	15.77	14.56	13.01	16.03	15.23	16.83	16.00	16.82	17.32	17.99
GDP growth	4.04	0.54	-6.37	11.55	2.09	0.30	2.41	2.56	2.60	2.65
GDP per capita growth	2.20	-1.33	-8.06	10.30	1.32	-0.36	1.77	1.95	2.02	2.07
Current account balance/GDP	-4.49	-5.21	-1.96	-7.28	-8.66	-3.54	-4.20	-4.01	-4.15	-4.20
Gross external financing needs/CAR&FXR	120.53	122.62	124.02	126.23	119.69	124.91	118.28	117.23	117.22	117.41
Narrow net external debt/CAR	45.59	60.52	76.74	87.01	79.90	85.27	91.73	90.74	91.62	91.52
GG balance/GDP	-1.48	-2.73	-7.12	-7.53	1.36	-2.27	-1.90	-1.30	-1.00	-1.00
GG net debt/GDP	13.02	15.34	22.31	30.54	29.27	31.55	32.91	33.44	33.42	33.23
CPI inflation	2.43	2.55	3.05	4.52	11.64	7.58	3.69	3.19	3.01	3.03
Bank credit to resident private sector/GDP	81.95	87.34	88.50	81.04	82.62	79.81	81.04	82.28	83.60	85.08
e--Estimate.

Colombia (BB+/Negative/B)

• Analyst: manuel.orozco@spglobal.com
• Latest publication: Colombia Outlook Revised To Negative On Subdued Economic Growth Prospects; 'BB+/B' Foreign Currency Ratings Affirmed, Jan. 18, 2024

Rating score snapshot

• Institutional assessment: 3
• Economic assessment: 4
• External assessment: 5
• Fiscal assessment – flexibility and performance: 4
• Fiscal assessment – debt burden: 4
• Monetary assessment: 3

Outlook: Negative

We expect broad continuity in fiscal and monetary policies within a stable political environment. Our outlook is negative because potentially persistently weak investor confidence--that affects private-sector investment--may pose risks to our expectation that GDP growth will return to its trend rate of just above 3% in the next couple of years. Low economic growth may indicate less economic resilience and could, absent corrective measures, contribute to fiscal slippage or higher external vulnerabilities.

Downside scenario.  We could downgrade Colombia during the next two years if economic growth is below our expectations. We could also lower the rating if larger-than-expected current account deficits (CAD) worsen Colombia's already weak external profile or if unexpected fiscal slippage contributes to weaker public finances.

Upside scenario.  Conversely, we could revise the outlook to stable during the next 12-24 months if we perceive less risk to Colombia's expected trend economic growth, likely coupled with policy steps that improve the sovereign's financial profile. A larger and more diverse export sector, helping to reduce external vulnerability and strengthen economic resilience, could also lead us to revise the outlook to stable.

Table 13

Colombia
	2018	2019	2020	2021	2022	2023	2024e	2025e	2026e	2027e
GDP per capita (in ‘000)	6.93	6.54	5.37	6.24	6.69	6.97	8.06	8.38	8.60	8.88
GDP growth	2.56	3.19	-7.19	10.80	7.29	0.61	1.07	2.76	2.96	3.07
GDP per capita growth	0.78	0.81	-8.99	9.33	6.12	-0.44	0.04	1.74	1.97	2.11
Current account balance/GDP	-4.20	-4.58	-3.43	-5.64	-6.14	-2.52	-2.82	-3.54	-3.46	-3.50
Gross external financing needs/CAR&FXR	98.42	100.59	96.75	97.94	106.45	100.04	101.56	98.25	97.34	96.71
Narrow net external debt/CAR	122.33	125.44	179.52	148.61	116.21	130.52	118.95	120.74	121.88	124.07
GG balance/GDP	-2.62	-2.16	-8.26	-8.29	-6.44	-3.71	-5.60	-4.70	-4.00	-4.00
GG net debt/GDP	43.35	45.59	59.35	59.34	57.31	53.27	55.55	56.85	57.62	58.19
CPI inflation	3.24	3.50	2.54	3.49	10.15	11.77	6.42	3.88	3.19	2.98
Bank credit to resident private sector/GDP	50.39	52.41	55.34	51.89	44.67	43.48	42.05	41.95	42.45	43.51
e--Estimate.

Costa Rica (BB-/Stable/B)

• Analyst: Karla.Gonzalez@spglobal.com
• Latest publication: Costa Rica Long-Term Ratings Raised To 'BB-' On Stronger Financial Performance Amid Solid Growth; Outlook Stable, Oct. 27, 2023

Rating score snapshot

• Institutional assessment: 4
• Economic assessment: 4
• External assessment: 4
• Fiscal assessment – flexibility and performance: 5
• Fiscal assessment – debt burden: 6
• Monetary assessment: 4

Outlook: Stable

The stable outlook incorporates our assumptions that over the next year, fiscal execution will remain solid, though we expect the deficit to increase somewhat and GDP growth to slow given the global backdrop. We believe maintaining access to official financing--including disbursements under the IMF's Extended Fund Facility (EFF) and Resilience and Sustainability Facility (RSF)--supports funding flexibility and confidence in the local and global capital markets. Access to the RSF, designed to bolster resilience to climate change, was recently approved by the Legislative Assembly.

Downside scenario.  We could lower the ratings over the next 12 months if policy reversals or fiscal implementation setbacks threaten smooth debt management. While the government's funding needs have declined as deficits have come down, they remain high over the next several years. Success in tapping global capital markets would likely indicate continued fiscal commitment, compliance with IMF reviews, and favorable growth prospects. If policy setbacks occur, recourse to central bank or other unconventional financing could cause us to view the country's institutional framework and ability to support public finances less favorably and lead us to lower the ratings.

Upside scenario.  Conversely, we could raise the ratings over the next 12 months if the government and the Legislative Assembly continue to reduce the deficit. So far, results reflect implementation of the 2018 reform. Moving forward, they will also depend on implementation of the public-sector employment reform and a modified fiscal rule. Given the government's relatively high interest burden, additional deficit reduction could sustain access to markets at favorable interest rates amid higher-for-longer interest rates globally.

In the complex global climate, Costa Rica appears to be benefiting from nearshoring and friendshoring. Strong inflows of foreign direct investment (FDI) and growth in service exports could boost trend GDP growth. That, along with solid fiscal performance, could lead to an upgrade.

Table 14

Costa Rica
	2018	2019	2020	2021	2022	2023	2024e	2025e	2026e	2027e
GDP per capita (in ‘000)	11.93	13.11	11.74	12.20	14.45	16.92	17.96	18.68	19.32	20.17
GDP growth	2.62	2.42	-4.27	7.94	4.55	5.11	3.30	3.30	3.30	3.30
GDP per capita growth	1.47	1.35	-5.26	6.86	3.57	4.14	2.31	2.27	2.24	2.20
Current account balance/GDP	-3.12	-1.24	-1.05	-3.26	-2.96	-0.95	-3.09	-3.36	-3.48	-3.67
Gross external financing needs/CAR&FXR	100.94	99.77	93.35	104.61	107.22	104.09	103.58	102.72	100.64	99.97
Narrow net external debt/CAR	49.63	44.97	51.62	45.48	38.14	28.00	27.33	26.84	26.40	26.43
GG balance/GDP	-4.89	-5.30	-7.74	-7.09	-3.74	-4.02	-3.30	-3.30	-3.20	-3.20
GG net debt/GDP	51.86	55.04	63.07	63.88	60.92	60.37	60.56	61.13	61.04	60.40
CPI inflation	2.22	2.10	0.72	1.73	8.27	0.53	1.00	2.00	2.00	2.00
Bank credit to resident private sector/GDP	59.37	55.23	59.19	55.56	51.65	50.10	50.10	50.10	50.10	50.10
e--Estimate.

Curacao (BBB-/Stable/A-3)

• Analyst: Julia.smith@spglobal.com
• Last Publication: (Full Analysis) Curacao, Feb. 15, 2024

Rating score snapshot

• Institutional assessment: 3
• Economic assessment: 5
• External assessment: 2
• Fiscal assessment – flexibility and performance: 2
• Fiscal assessment – debt burden: 1
• Monetary assessment: 5

Outlook: Stable

The stable outlook reflects our expectation that discussions with the Netherlands regarding Curacao's liquidity loans, contingent on an agreement related to the resolution of a local financial institution, as well as progress under its country package of reforms, will advance smoothly, limiting the risk of potential political strain. At the same time, we expect the recovery will continue but decelerate over the next several years, as the economy becomes more reliant on tourism.

Downside scenario.  We could lower the ratings over the next two years if we see unexpected weakening or polarization in the political relationship between Curacao and the Netherlands; or signs of slippage in implementing reforms needed to improve the government's fiscal position, affecting financing options or the recovery. We could view disagreement on the arrangement related to debt financing provided by the Netherlands as an erosion in the bilateral relationship. We could also lower the ratings in the medium term if the government's fiscal performance or net debt metrics were significantly weaker than expected, or if there were a persistent decline in the country's net external asset position.

Upside scenario.  We could raise the ratings if Curacao's relationship with the Netherlands improved materially, leading to significant economic, fiscal, or debt management benefits; and we believed that this improvement would not be subject to substantial execution risks associated with potential conditions attached to any revised agreement. We could also raise the ratings if long-term growth materially recovered and was sustainably in line with that of other sovereigns with similar income per capita.

(Latest research update published on Feb. 22, 2023)

Table 15

Curacao
	2018	2019	2020	2021	2022	2023	2024e	2025e	2026e	2027e
GDP per capita (in ‘000)	19.20	19.37	16.49	18.14	20.65	22.06	23.32	24.15	24.87	24.89
GDP growth	-2.17	-3.21	-18.04	4.18	7.89	4.40	4.00	2.00	1.50	1.30
GDP per capita growth	-1.13	-1.70	-16.68	5.98	9.44	3.37	2.77	0.79	0.30	0.10
Current account balance/GDP	-26.68	-17.87	-27.18	-18.51	-28.19	-24.26	-22.26	-21.26	-20.26	-19.26
Gross external financing needs/CAR&FXR	133.53	130.57	140.35	119.00	132.33	113.69	107.90	114.98	117.28	120.04
Narrow net external debt/CAR	-14.56	-25.38	-5.04	-84.45	-51.42	-58.81	-52.62	-47.30	-41.73	-41.36
GG balance/GDP	-7.92	0.73	-16.84	4.29	-6.43	4.20	-0.21	-0.44	-0.62	-0.68
GG net debt/GDP	-24.60	-32.70	-33.71	-37.10	-21.23	-28.75	-28.11	-27.80	-27.45	-27.82
CPI inflation	2.53	2.67	2.20	3.72	7.36	3.60	3.00	2.80	2.70	2.40
Bank credit to resident private sector/GDP	90.33	94.06	112.69	97.35	88.74	83.83	83.51	83.31	83.14	83.08
e--Estimate.

Dominican Republic (BB/Stable/B)

• Analyst: patricio.vimberg@spglobal.com
• Latest publication: (Full Analysis) Dominican Republic, Jan. 4, 2024

Rating score snapshot

• Institutional assessment: 4
• Economic assessment: 3
• External assessment: 4
• Fiscal assessment – flexibility and performance: 5
• Fiscal assessment – debt burden: 5
• Monetary assessment: 4

Outlook: Stable

The stable outlook reflects our expectation of continued favorable long-term GDP growth and policy continuity over the next 12-18 months amid the run-up to and aftermath of the presidential election in May 2024, along with a steady government debt burden and moderate fiscal results.

Downside scenario.  We could lower the ratings over the next 12-18 months if economic growth loses momentum for structural reasons, potentially resulting in higher fiscal deficits and a worsening external profile. We could also lower the ratings if the current challenges in passing reforms translate into substantially higher fiscal deficits and debt.

Upside scenario.  We could raise the ratings over the next 12-18 months if the Dominican Republic demonstrates a capacity to pass and implement reforms that improve its fiscal and debt planning, leading to lower government deficits.

(Latest research update published on Dec. 19, 2022)

Table 16

Dominican Republic
	2018	2019	2020	2021	2022	2023	2024e	2025e	2026e	2027e
GDP per capita (in ‘000)	8.33	8.59	7.55	8.95	10.59	11.34	11.59	12.08	12.58	13.10
GDP growth	6.98	5.05	-6.72	12.27	4.86	2.36	5.00	5.00	5.00	5.00
GDP per capita growth	5.97	4.12	-7.53	11.34	4.01	1.51	4.13	4.13	4.13	4.13
Current account balance/GDP	-1.54	-1.34	-1.70	-2.85	-5.82	-3.60	-3.25	-2.76	-2.45	-2.10
Gross external financing needs/CAR&FXR	91.00	89.86	89.53	87.74	94.09	89.55	85.92	85.77	86.78	83.78
Narrow net external debt/CAR	78.70	85.21	114.21	84.39	70.49	80.67	78.90	72.08	65.50	59.22
GG balance/GDP	-3.58	-3.42	-9.34	-3.52	-3.77	-4.05	-3.81	-3.59	-3.39	-3.20
GG net debt/GDP	46.08	49.40	65.70	57.36	54.26	55.40	55.82	55.92	55.81	55.52
CPI inflation	3.56	1.81	3.78	8.24	8.81	4.79	3.70	4.00	4.00	4.00
Bank credit to resident private sector/GDP	27.86	28.64	30.13	27.97	28.08	30.71	30.71	30.71	30.71	30.71
e--Estimate.

Ecuador (B-/Negative/B)

• Analyst: carolina.caballero@spglobal.com
• Latest publication: Ecuador Outlook Revised To Negative On Increasing Liquidity Strains; ‘B-‘ Long-Term Ratings Affirmed, Jan. 11, 2024

Rating score snapshot

• Institutional assessment: 6
• Economic assessment: 5
• External assessment: 6
• Fiscal assessment – flexibility and performance: 4
• Fiscal assessment – debt burden: 3
• Monetary assessment: 6

Outlook: Negative

The negative outlook indicates risks that the policy measures the Ecuadorian authorities implemented may be insufficient to improve fiscal performance and regain market access ahead of a challenging debt service profile starting in 2025. Manageable commercial debt payments this year should help contain credit risks. However, amortization becomes more challenging once principal payments begin on Ecuador's 2030 bond, which was issued in the latest debt restructuring. Delays in undertaking steps to reduce the fiscal deficit and improve investor confidence could make it more difficult for the government to fill its financing gap.

Downside scenario.  We could lower the ratings in the next 12 months if we perceive a weakening of the government's ability to prevent further widening of fiscal imbalances beyond our expectations or if support from multilateral and bilateral creditors is more limited than expected. Because access to international markets is still uncertain, larger fiscal deficits may increase reliance on short-term debt, raising refinancing risk.

At the same time, indications that the sovereign may be less willing to service its debt would prompt us to downgrade it. At the current rating level, we would likely consider a broad debt restructuring, debt repurchase, or debt exchange as distressed and tantamount to default.

Upside scenario.  We could revise the outlook to stable if we see progress in policy adjustments or reforms that strengthen Ecuador's financial profile. A faster reduction of Ecuador's fiscal deficit or more clarity on its financing strategy could contain the country's vulnerabilities. This scenario would likely facilitate Ecuador's access to financing, especially from private creditors locally and globally.

Table 17

Ecuador
	2018	2019	2020	2021	2022	2023	2024e	2025e	2026e	2027e
GDP per capita (in ‘000)	6.32	6.23	5.50	6.13	6.61	6.70	6.80	6.93	7.11	7.29
GDP growth	1.04	0.17	-9.25	9.82	6.19	2.36	1.00	1.00	1.50	1.50
GDP per capita growth	-0.59	-1.42	-10.11	9.27	5.57	1.76	0.42	0.50	1.00	1.00
Current account balance/GDP	-1.22	-0.20	2.30	2.88	1.83	1.93	2.41	1.28	0.76	0.79
Gross external financing needs/CAR&FXR	155.49	149.11	145.45	116.98	112.60	110.17	113.30	114.87	113.75	113.66
Narrow net external debt/CAR	147.60	159.43	179.95	144.71	121.07	123.96	115.50	115.11	115.22	113.43
GG balance/GDP	-3.70	-4.02	-7.47	-2.56	0.17	-3.90	-2.70	-2.70	-2.50	-2.50
GG net debt/GDP	42.89	49.39	61.58	54.66	51.73	53.08	54.74	56.09	56.95	57.78
CPI inflation	0.27	-0.07	-0.08	0.13	3.47	2.21	1.00	1.50	1.50	1.50
Bank credit to resident private sector/GDP	35.99	40.10	46.27	47.37	50.14	53.74	55.32	56.66	57.98	61.33
e--Estimate.

El Salvador (B-/Stable/B)

• Analyst: omar.delatorre@spglobal.com
• Latest publication: (Full Analysis) El Salvador, June 26, 2024

Rating score snapshot

• Institutional assessment: 6
• Economic assessment: 5
• External assessment: 5
• Fiscal assessment – flexibility and performance: 6
• Fiscal assessment – debt burden: 6
• Monetary assessment: 6

Outlook: Stable

The stable outlook balances El Salvador's fragile fiscal position--marked by consistent fiscal deficits, high interest, and a high debt burden--with its reduced financing needs, a result of its very active debt management policy.

Downside scenario.  We could lower the ratings over the next six to 12 months if we see a weakening in the government's ability to undertake fiscal adjustment measures to stabilize its debt burden. We could also downgrade El Salvador if its fiscal funding sources become more limited or if there are signs that the government is becoming less willing to service its debt.

Upside scenario.  We could raise the ratings in the next six to 12 months if the government is able to implement comprehensive reforms to close its fiscal deficits and reduce its financing needs, leading to a faster-than-expected stabilization of its debt levels. Stronger-than-expected growth could also facilitate fiscal consolidation and support a rating upgrade.

(Latest research update published on April 11, 2024)

Table 18

El Salvador
	2018	2019	2020	2021	2022	2023	2024e	2025e	2026e	2027e
GDP per capita (in ‘000)	4.05	4.17	3.84	4.46	4.88	5.17	5.35	5.54	5.73	5.92
GDP growth	2.41	2.44	-7.89	11.90	2.80	3.51	2.50	2.40	2.40	2.40
GDP per capita growth	1.89	1.92	-8.36	11.35	2.29	3.00	1.99	1.89	1.89	1.89
Current account balance/GDP	-3.30	-0.42	1.11	-4.31	-6.82	-1.69	-2.39	-2.17	-2.38	-2.59
Gross external financing needs/CAR&FXR	127.58	121.95	113.15	122.02	124.58	119.03	119.46	118.64	116.73	118.86
Narrow net external debt/CAR	78.88	78.42	93.74	70.65	66.04	74.39	73.92	73.80	73.32	72.89
GG balance/GDP	-2.70	-3.07	-10.03	-5.53	-2.69	-4.66	-4.39	-4.18	-4.07	-3.95
GG net debt/GDP	65.98	67.10	83.00	77.66	73.54	73.89	75.34	76.67	77.84	78.84
CPI inflation	1.09	0.08	-0.37	3.47	7.19	4.05	1.60	1.50	1.50	1.50
Bank credit to resident private sector/GDP	57.28	59.07	65.33	61.14	62.38	61.45	60.86	60.27	59.69	59.12
e--Estimate.

Falkland Islands (A+/Stable/A-1)

• Analyst: jennifer.love@spglobal.com
• Latest publication: (Full Analysis) The Falkland Islands, March 25, 2024

Rating score snapshot

• Institutional assessment: 3
• Economic assessment: 2
• External assessment: 4
• Fiscal assessment – flexibility and performance: 1
• Fiscal assessment – debt burden: 1
• Monetary assessment: 6

Outlook: Stable

The stable outlook is based on S&P Global Ratings' expectation of continued prudent fiscal policy, GDP growth, and strong public finances during the next three years. It also reflects our expectation that institutional links with the U.K. will remain strong, anchoring policy stability and security.

Downside scenario.  We could lower the ratings over the next two-three years if we saw an unexpected deterioration in public finances or economic growth prospects, including a worsening of the government's current net asset position. We could also lower the ratings if unanticipated changes in the institutional and political links with the U.K. were to raise uncertainty about future policies, governance, or security.

Upside scenario.  We could raise the ratings over the next two-three years if we saw a continued record of cautious policymaking that delivers balanced economic growth, sustains healthy finances, and improves the Falkland Islands' physical infrastructure. We could also raise the ratings if improvements in the availability of statistical data, such as full balance of payments and international investment position, improve our assessment of external risk and enhance transparency.

(Latest research update published on May 10, 2021)

Table 19

Falkland Islands
	2018	2019	2020	2021	2022	2023	2024e	2025e	2026e	2027e
GDP per capita (in ‘000)	107.03	101.47	103.29	115.16	104.38	111.59	119.75	123.01	126.38	129.87
GDP growth	3.77	12.25	-8.37	-0.55	-5.80	-0.89	2.00	2.00	2.00	2.00
GDP per capita growth	3.77	12.25	-8.40	1.35	-5.80	-0.89	2.00	2.00	2.00	2.00
Current account balance/GDP	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A
Gross external financing needs/CAR&FXR	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A
Narrow net external debt/CAR	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A
GG balance/GDP	9.07	-1.06	1.60	2.45	0.52	-1.40	-11.86	-10.97	-10.98	2.02
GG net debt/GDP	-132.58	-153.52	-157.76	-175.21	-154.00	-143.78	-143.59	-130.30	-118.03	-112.78
CPI inflation	3.14	1.50	-1.45	2.53	6.95	6.89	2.80	2.40	2.10	2.00
Bank credit to resident private sector/GDP	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00
e--Estimate. N/A--Not applicable.

Guatemala (BB/Positive/B)

• Analyst: patricio.vimberg@spglobal.com
• Latest publication: Guatemala Outlook Revised To Positive On Sustained Macroeconomic Resilience; 'BB/B' Ratings Affirmed, April 18, 2024

Rating score snapshot

• Institutional assessment: 4
• Economic assessment: 5
• External assessment: 2
• Fiscal assessment – flexibility and performance: 3
• Fiscal assessment – debt burden: 3
• Monetary assessment: 4

Outlook: Positive

The positive outlook indicates our expectation of an upgrade in the next 6-12 months if cautious macroeconomic policies prevail, despite somewhat higher fiscal deficits stemming from the planned rise in infrastructure spending. The positive outlook also reflects the country's strong external resilience despite long-standing institutional challenges and episodes of political uncertainty.

Downside scenario.  We could revise the outlook to stable in the next 6-12 months if worse-than-expected economic performance or increased political tensions undermine Guatemala's medium-term GDP growth trajectory or constrain the government's ability to keep cautious macroeconomic policies. We could also lower the ratings if there were to be a substantial increase in fiscal deficits and debt intake to finance operating expenditures, rather than improving the country's infrastructure.

Upside scenario.  We could raise the ratings in the next 6-12 months on signs that the new administration and Congress can collaborate on policy initiatives, particularly those that entrench and extend cautious macroeconomic policies. This could raise investor confidence and lead to higher-than-expected economic growth.

Table 20

Guatemala
	2018	2019	2020	2021	2022	2023	2024e	2025e	2026e	2027e
GDP per capita (in ‘000)	4.49	4.65	4.61	5.05	5.51	5.93	6.27	6.60	6.94	7.31
GDP growth	3.41	4.02	-1.79	8.03	4.20	3.53	3.50	3.50	3.50	3.50
GDP per capita growth	1.77	2.41	-3.27	6.45	2.71	2.09	2.10	2.15	2.19	2.23
Current account balance/GDP	0.89	2.36	5.05	2.17	1.25	3.14	1.19	-0.41	-1.38	-2.02
Gross external financing needs/CAR&FXR	68.77	65.22	55.92	62.14	64.88	63.22	65.84	69.90	72.37	74.27
Narrow net external debt/CAR	23.11	13.57	-0.60	-6.91	-7.96	-10.92	-15.26	-15.13	-12.11	-7.26
GG balance/GDP	-0.94	-1.72	-3.57	-0.62	-1.02	-0.79	-0.10	-2.10	-2.10	-2.10
GG net debt/GDP	15.22	15.76	19.53	17.55	16.76	15.40	14.53	15.70	16.80	17.82
CPI inflation	3.75	3.70	3.21	4.26	6.89	6.21	4.00	4.00	4.00	4.00
Bank credit to resident private sector/GDP	36.68	35.83	37.61	38.04	39.78	41.39	41.39	41.39	41.39	41.49
e--Estimate.

Honduras (BB-/Stable/B)

• Analyst: patricio.vimberg@spglobal.com
• Latest publication: Honduras Outlook Revised To Stable From Negative On Contained Fiscal Deficits; 'BB-/B' Ratings Affirmed, Sept. 29, 2023

Rating score snapshot

• Institutional assessment: 5
• Economic assessment: 5
• External assessment: 2
• Fiscal assessment – flexibility and performance: 5
• Fiscal assessment – debt burden: 4
• Monetary assessment: 4

Outlook: Stable

The stable outlook incorporates our expectation of moderate GDP growth, continued good access to official funding, and a fiscal policy that contributes to a stable net general government debt burden over the next two years. Despite political polarization and a divided Congress, we expect the government to continue making gradual progress toward strengthening public finances.

Downside scenario.  We could lower the ratings in the next six to 18 months if adverse developments elevate fiscal and external imbalances beyond our expectations. In addition, negative political developments in the country could potentially depress GDP growth and investor confidence, leading to a downgrade.

Upside scenario.  We could raise the ratings in the next six to 18 months if we see economic and fiscal results that exceed our expectations. Successful implementation of reforms that result in stronger public finances and higher long-term GDP growth, while addressing weaknesses in the energy sector, could lead to an upgrade.

Table 21

Honduras
	2018	2019	2020	2021	2022	2023	2024e	2025e	2026e	2027e
GDP per capita (in ‘000)	2.65	2.70	2.49	2.96	3.25	3.51	3.73	3.94	4.17	4.41
GDP growth	3.84	2.56	-8.97	12.57	4.14	3.58	3.60	3.60	3.60	3.60
GDP per capita growth	2.16	0.92	-10.39	10.82	2.55	2.02	2.06	2.08	2.11	2.13
Current account balance/GDP	-5.49	-1.60	3.89	-3.49	-4.43	-2.64	-2.87	-2.87	-2.87	-2.67
Gross external financing needs/CAR&FXR	93.01	90.96	78.90	82.55	86.25	87.30	90.23	91.05	91.13	91.05
Narrow net external debt/CAR	39.63	30.68	22.98	18.23	16.48	19.76	20.63	21.24	21.85	22.47
GG balance/GDP	0.20	0.09	-4.58	-3.17	0.45	-1.96	-2.32	-2.15	-1.62	-1.63
GG net debt/GDP	39.76	40.38	52.97	52.31	50.03	45.22	45.66	46.03	45.85	45.69
CPI inflation	4.35	4.37	3.48	4.47	9.08	6.69	4.30	4.00	4.00	4.00
Bank credit to resident private sector/GDP	63.33	65.05	70.98	67.12	70.57	76.02	76.02	76.02	76.02	76.02
e--Estimate.

Jamaica (BB-/Stable/B)

• Analyst: jennifer.love@spglobal.com
• Latest publication: Jamaica Long-Term Ratings Raised To 'BB-' From 'B+' On Improved Finances; Outlook Stable, Sept. 13, 2023

Rating score snapshot

• Institutional assessment: 4
• Economic assessment: 6
• External assessment: 4
• Fiscal assessment – flexibility and performance: 1
• Fiscal assessment – debt burden: 5
• Monetary assessment: 4

Outlook: Stable

The stable outlook reflects our expectation that Jamaica will continue to pursue cautious macroeconomic policy and maintain its commitment to prudent public sector finances and debt reduction. We assume that small fiscal surpluses will sustain a decline in debt over the next one-two years. Furthermore, we expect tourism will continue to support external balances and GDP growth.

Downside scenario.  We could lower the ratings during the next two years if we believed a changing fiscal policy would lead to sustained deficits, reversing debt reduction and resulting in a persistently higher debt burden; or if the economy fails to perform as expected, weakening the country's external position.

Upside scenario.  We could raise the ratings over the next two years if Jamaica's trend economic growth rate rose consistently and converged with that of peers at a similar level of economic development. That, along with continuity in fiscal policy, would increase the sovereign's economic resilience.

Table 22

Jamaica
	2018	2019	2020	2021	2022	2023	2024e	2025e	2026e	2027e
GDP per capita (in ‘000)	5.76	5.79	5.05	5.35	6.23	7.07	7.44	7.70	7.96	8.23
GDP growth	1.90	0.89	-9.91	4.60	3.89	2.10	1.55	1.30	1.30	1.30
GDP per capita growth	1.71	0.78	-10.02	4.48	3.75	1.96	1.43	1.17	1.17	1.17
Current account balance/GDP	-1.49	-1.91	-1.14	1.02	-0.76	3.00	2.49	2.64	2.57	2.56
Gross external financing needs/CAR&FXR	99.80	101.09	100.51	99.94	98.76	94.67	93.25	92.52	91.09	88.78
Narrow net external debt/CAR	88.30	76.46	108.32	74.82	57.67	51.47	51.76	48.71	44.29	37.95
GG balance/GDP	1.40	1.11	-2.87	1.15	0.45	0.44	0.63	0.72	0.91	0.90
GG net debt/GDP	78.17	72.94	86.73	77.88	62.24	59.25	55.99	53.22	50.25	47.49
CPI inflation	3.66	3.95	5.23	5.87	10.35	6.47	5.00	5.00	5.00	5.00
Bank credit to resident private sector/GDP	44.01	48.73	57.09	55.13	51.54	49.87	52.22	54.83	57.40	60.14
e--Estimate

Mexico (BBB/Stable/A-2)

• Analyst: joydeep.mukherji@spglobal.com
• Latest publication: Mexico 'BBB' Foreign Currency And 'BBB+' Local Currency Long-Term Ratings Affirmed; Outlook Remains Stable, Feb. 1, 2024

Rating score snapshot

• Institutional assessment: 3
• Economic assessment: 5
• External assessment: 2
• Fiscal assessment – flexibility and performance: 4
• Fiscal assessment – debt burden: 4
• Monetary assessment: 3

Outlook: Stable

The stable outlook reflects our expectation that cautious macroeconomic management will prevail over the next two years, notwithstanding complex global conditions. This horizon includes the run-up to June's national elections, the presidential transition period, and the start of the next administration.

Our base case assumes that whatever the outcome of June's elections, the next government will extend Mexico's record of cautious macroeconomic policy execution, including prudent monetary policy and a return to low fiscal deficits. We do not expect advancement of major policy initiatives that either improve or hurt Mexico's business climate--or affect trend economic growth--amid the elections in the U.S. and Mexico this year.

Downside scenario.  Unexpected setbacks in macroeconomic management or in relations between U.S.-Mexico-Canada Agreement (USMCA) partners on strengthening cooperation, supply-chain resilience, and cross-border linkages would likely weaken investor sentiment and investment and could lead to a downgrade over the next two years.

Persistently higher general government deficits that lead to a sharper-than-expected rise in general government debt would heighten fiscal risks as well as compound the risk of extraordinary support to state-owned companies Pemex and Comision Federal de Electricidad (CFE) and could also lead to a downgrade.

Upside scenario.  Effective political and economic management that bolsters Mexico's subpar growth trajectory, such as with a more dynamic investment outlook, could lead to an upgrade. Similarly, initiatives that bolster budgetary flexibility, support fiscal buffers, and broaden the non-oil tax base to mitigate the potential contingent liability posed by state-owned companies in the energy sector would improve creditworthiness.

Table 23

Mexico
	2018	2019	2020	2021	2022	2023	2024e	2025e	2026e	2027e
GDP per capita (in ‘000)	9.95	10.23	8.68	10.06	11.11	13.47	14.22	14.17	14.34	14.45
GDP growth	1.97	-0.25	-8.62	5.74	4.15	3.20	2.16	1.74	2.09	2.25
GDP per capita growth	0.83	-1.33	-9.58	4.66	3.13	2.22	1.22	0.83	1.20	1.34
Current account balance/GDP	-2.07	-0.44	2.01	-0.64	-1.19	-1.27	-1.68	-2.09	-2.31	-2.34
Gross external financing needs/CAR&FXR	87.88	87.62	82.02	87.21	88.21	87.73	90.79	90.12	91.22	91.59
Narrow net external debt/CAR	46.80	51.72	57.22	38.67	28.43	29.28	27.58	27.93	28.13	28.35
GG balance/GDP	-1.78	-1.75	-2.26	-2.95	-3.26	-2.97	-5.70	-4.20	-3.10	-2.80
GG net debt/GDP	40.13	40.36	45.56	45.47	44.99	45.75	49.46	51.48	52.59	53.36
CPI inflation	4.90	3.64	3.40	5.69	7.90	5.53	4.55	3.73	3.21	3.03
Bank credit to resident private sector/GDP	27.56	29.23	28.95	27.51	27.41	26.61	26.70	26.78	26.87	26.95
e--Estimate.

Montserrat (BBB-/Stable/A-3)

• Analyst: jennifer.love@spglobal.com
• Latest publication: (Full Analysis) Montserrat, April 24, 2024

Rating score snapshot

• Institutional assessment: 2
• Economic assessment: 5
• External assessment: 3
• Fiscal assessment – flexibility and performance: 4
• Fiscal assessment – debt burden: 1
• Monetary assessment: 5

Outlook: Stable

The stable outlook reflects our expectation that budgetary and institutional support for Montserrat from the U.K. will continue over the next two years. We believe the recovery in Montserrat will be spurred mainly by the public sector and key construction projects, while tourism is expected to gradually increase. We believe the U.K.'s support for Montserrat will be unchanged and will continue to underpin the island's creditworthiness and mitigate the risks from external vulnerabilities, particularly given the continuing low-level activity of the Soufriere Hills volcano and the island's location in a hurricane belt.

Downside scenario.  We could lower the ratings over the next two years if the U.K.'s financial support substantially and unexpectedly wanes, particularly before the domestic economy approaches self-sufficiency. This could exacerbate external liquidity risks arising from Montserrat's significant gross external financing needs.

Under this scenario, we expect the loss of a significant portion of government revenue (grants from the U.K.) would contribute to large fiscal and external deficits and could lead to a multinotch downgrade. The U.K.'s failure to provide timely support in the wake of a natural disaster could exacerbate these risks.

Upside scenario.  Significant private sector investment and faster public sector execution of infrastructure development on the island could lead to an upgrade in the next couple of years. Such activities would increase the size and resilience of Montserrat's economy, broadening the tax base. Sustainable private sector growth--particularly in the tourism and export sectors--could raise the island's income and reduce economic concentration in public services.

This expansion, along with immigration to build the labor force, would also increase imports. To be sustainable, export growth and foreign direct investment would need to finance this expansion, limiting the increase of net external borrowing from the island's large external financing needs.

(Latest research update published on April 13, 2021)

Table 24

Montserrat
	2018	2019	2020	2021	2022	2023	2024e	2025e	2026e	2027e
GDP per capita (in ‘000)	13.48	14.53	14.45	15.82	16.30	17.92	18.66	19.27	19.84	20.33
GDP growth	7.58	6.41	-1.13	5.48	2.52	3.75	3.50	2.00	2.00	2.00
GDP per capita growth	9.90	9.90	-3.42	9.46	3.10	7.11	3.50	2.00	2.00	2.00
Current account balance/GDP	-2.28	2.30	9.06	-18.85	-11.45	-9.53	-13.84	-12.11	-10.65	-9.56
Gross external financing needs/CAR&FXR	122.55	118.09	114.29	148.20	129.92	129.47	142.29	142.09	141.34	141.04
Narrow net external debt/CAR	-167.63	-168.46	-211.35	-205.01	-150.51	-130.31	-138.19	-136.22	-134.57	-133.38
GG balance/GDP	-0.96	-12.60	-3.96	1.24	3.95	4.37	0.00	0.00	0.00	0.00
GG net debt/GDP	-14.41	-7.52	-5.76	-4.32	-3.76	-1.56	-1.19	-0.85	-0.39	0.04
CPI inflation	1.31	-1.07	-1.89	2.61	2.98	-1.09	0.65	1.29	0.96	0.45
Bank credit to resident private sector/GDP	51.92	48.92	48.32	46.48	40.76	39.91	38.32	37.10	36.04	35.18
e--Estimate.

Nicaragua (B/Stable/B)

• Analyst: omar.delatorre@spglobal.com
• Latest publication: (Full Analysis) Nicaragua, Nov. 9, 2023

Rating score snapshot

• Institutional assessment: 5
• Economic assessment: 5
• External assessment: 5
• Fiscal assessment – flexibility and performance: 4
• Fiscal assessment – debt burden: 2
• Monetary assessment: 5

Outlook: Stable

The stable outlook reflects our view of continued economic growth coupled with fiscal and monetary policies that sustain economic stability amid challenging global economic conditions.

Downside scenario.  We could lower the ratings in the next six to 18 months if Nicaragua's current economic performance were to be undermined by weaker demand from its trade partners, external shocks, or unexpected political tensions. Heightened pressures on the domestic financial system that hurt stability could also lead us to lower the rating.

Upside scenario.  We could raise the ratings over the next six to 18 months if favorable political and policy developments raise investor confidence, lead to higher-than-expected economic growth, and improve the sovereign's access to external funding. A track record of strengthening economic and fiscal results that lower Nicaragua's exposure to negative external shocks on a consistent basis could also lead to an upgrade.

(Latest research update published on Oct. 25, 2022)

Table 25

Nicaragua
	2018	2019	2020	2021	2022	2023	2024e	2025e	2026e	2027e
GDP per capita (in ‘000)	2.02	1.95	1.92	2.12	2.32	2.62	2.78	2.94	3.11	3.28
GDP growth	-3.36	-2.90	-1.76	10.32	3.75	4.57	3.50	3.50	3.50	3.50
GDP per capita growth	-4.36	-3.90	-2.77	9.18	2.68	3.49	2.43	2.43	2.43	2.43
Current account balance/GDP	-1.80	5.94	3.71	-3.83	-2.54	6.54	3.24	1.26	0.29	-0.65
Gross external financing needs/CAR&FXR	100.54	96.34	92.49	98.10	94.20	83.13	82.03	231.04	377.11	455.73
Narrow net external debt/CAR	121.14	111.80	121.01	101.41	77.76	54.87	51.19	49.61	47.60	45.69
GG balance/GDP	-3.02	-0.32	-1.78	-1.20	0.98	2.74	0.45	0.44	0.24	0.03
GG net debt/GDP	45.38	48.64	51.35	52.09	45.74	-8.36	-9.33	-9.11	-8.71	-8.13
CPI inflation	4.95	5.38	3.68	4.93	10.47	8.39	4.00	4.00	4.00	4.00
Bank credit to resident private sector/GDP	36.09	30.00	27.99	25.78	26.24	26.92	27.67	28.44	29.23	30.05
e--Estimate.

Panama (BBB/Negative/A-2)

• Analyst: alexis.smith-juvelis@spglobal.com
• Latest publication: Panama Outlook Revised To Negative From Stable On Potential Risks To Investor Confidence And Economic Growth, Nov. 7, 2023

Rating score snapshot

• Institutional assessment: 3
• Economic assessment: 2
• External assessment: 5
• Fiscal assessment – flexibility and performance: 3
• Fiscal assessment – debt burden: 4
• Monetary assessment: 5

Outlook: Negative

The negative outlook reflects the risk of potential damage to investor confidence and to future private investment stemming from the ongoing controversy over a mining contract with Minera Panama, which operates a large copper mining project. Strong political opposition to the project has raised uncertainty about its fate and led to a recent moratorium on new mining projects. Such developments could weaken private investment and negatively affect the country's long-term growth prospects, leading to a downgrade.

Downside scenario.  We could lower the rating in the coming year if the recent political developments worsen investor confidence, weighing on the country's long-term economic resilience and GDP growth.

Upside scenario.  We could revise the outlook to stable in the coming year if the current and the future administrations demonstrate cautious political and economic management that contains social unrest and reduces uncertainty. That, in turn, would sustain investor confidence and support the country's favorable long-term GDP growth prospects.

Table 26

Panama
	2018	2019	2020	2021	2022	2023	2024e	2025e	2026e	2027e
GDP per capita (in ‘000)	17.64	18.01	14.54	16.92	18.93	20.34	21.05	22.17	23.35	24.60
GDP growth	4.39	3.28	-17.67	15.84	10.81	7.32	2.50	4.50	4.50	4.50
GDP per capita growth	2.90	1.81	-18.85	14.18	9.23	5.78	1.28	3.26	3.26	3.26
Current account balance/GDP	-7.38	-4.78	-0.33	-1.16	-0.62	-4.48	-4.79	-4.87	-4.96	-5.06
Gross external financing needs/CAR&FXR	177.73	181.24	189.07	145.44	144.21	164.45	198.35	194.94	191.13	187.44
Narrow net external debt/CAR	78.15	90.58	104.34	97.54	95.38	111.53	141.46	140.62	139.59	138.61
GG balance/GDP	-2.70	-2.90	-9.58	-6.46	-3.94	-3.18	-3.68	-2.40	-2.05	-1.88
GG net debt/GDP	25.17	29.41	46.55	44.39	43.06	44.02	43.95	43.32	42.39	41.34
CPI inflation	0.77	-0.29	-1.62	1.65	2.86	1.48	2.20	2.00	2.00	2.00
Bank credit to resident private sector/GDP	78.93	77.81	93.27	80.57	74.23	70.34	70.17	68.79	67.44	67.70
e--Estimate.

Paraguay (BB+/Stable/B)

• Analyst: carolina.caballero@spglobal.com
• Latest publication: Paraguay Long-Term Ratings Raised To ‘BB+’ On Greater Economic Resiliency; Outlook Stable, Feb. 1, 2024

Rating score snapshot

• Institutional assessment: 4
• Economic assessment: 4
• External assessment: 2
• Fiscal assessment – flexibility and performance: 3
• Fiscal assessment – debt burden: 3
• Monetary assessment: 5

Outlook: Stable

The stable outlook reflects our view that continued strengthening of the Paraguayan economy, supported by private-sector investments, could mitigate potential climate risks and contribute to the government's capacity to absorb recent increases in debt.

Downside scenario.  We could lower the ratings in the next 12-18 months if slower-than-expected growth, due to higher frequency of external and weather shocks, reduces the growth potential and weakens the government's commitment to fiscal consolidation. This could weaken the economy and increase the debt burden.

Upside scenario.  We could raise the ratings in the next 24 months if effective political and economic management leads to a sustainable fiscal consolidation amid continued strengthening of Paraguay's political and economic institutions, reducing the government's vulnerabilities to the level of those of investment-grade sovereigns.

Table 27

Paraguay
	2018	2019	2020	2021	2022	2023	2024e	2025e	2026e	2027e
GDP per capita (in ‘000)	6.76	6.33	5.88	6.58	6.87	6.98	7.34	7.73	8.21	8.57
GDP growth	3.20	-0.40	-0.82	4.02	0.18	4.71	3.90	3.50	3.50	2.50
GDP per capita growth	2.53	-1.06	-1.47	3.33	-0.48	4.03	3.22	2.82	2.82	1.83
Current account balance/GDP	-0.22	-0.58	1.89	-0.87	-7.13	0.26	-0.88	-1.49	-1.70	-0.98
Gross external financing needs/CAR&FXR	79.77	81.19	75.49	74.48	86.53	79.86	82.49	81.72	83.24	82.38
Narrow net external debt/CAR	5.25	11.89	19.53	26.48	41.35	36.90	33.59	32.43	31.53	29.92
GG balance/GDP	-1.00	-2.38	-5.72	-3.39	-2.64	-3.92	-2.60	-2.20	-1.70	-1.70
GG net debt/GDP	7.90	11.27	19.20	20.37	26.10	26.92	28.63	28.52	28.49	28.73
CPI inflation	3.20	1.45	1.72	4.79	9.77	4.65	4.30	4.00	4.00	3.50
Bank credit to resident private sector/GDP	38.26	40.90	44.39	44.52	44.75	47.09	48.17	49.23	49.32	49.41
e--Estimate.

Peru (BBB-/Stable/A-3)

• Analyst: constanza.perez.aquino@spglobal.com
• Latest publication: Peru Long-Term Foreign Currency Rating Lowered To 'BBB-' On Political Uncertainty Constraining Growth; Outlook Stable, April 25, 2024

Rating score snapshot

• Institutional assessment: 4
• Economic assessment: 4
• External assessment: 3
• Fiscal assessment – flexibility and performance: 2
• Fiscal assessment – debt burden: 3
• Monetary assessment: 3

Outlook: Stable

The stable outlook incorporates our expectation of a moderate recovery in real GDP, while net general government debt continues to rise but remains below 30% of GDP over 2024-2027. We assume Peru's monetary policy credibility and strong external position will remain ratings strengths.

Downside scenario.  We could lower the ratings over the next two years if there is a pronounced shift in economic policy that precipitates further deterioration in investor sentiment and growth prospects. Lower growth could, in turn, put additional pressure on fiscal deficits and accelerate an increase in the debt burden.

Upside scenario.  We could raise the ratings over the next two years if stable political conditions support effective policy execution that boosts investment and economic growth prospects. Under this scenario, we would also expect a moderately stable debt trajectory.

Table 28

Peru
	2018	2019	2020	2021	2022	2023	2024e	2025e	2026e	2027e
GDP per capita (in ‘000)	7.20	7.27	6.37	6.89	7.34	7.92	8.22	8.45	8.55	8.66
GDP growth	3.97	2.24	-10.87	13.42	2.68	-0.55	2.68	2.96	3.06	3.18
GDP per capita growth	2.65	0.94	-12.00	11.98	1.38	-1.81	1.38	1.65	1.75	1.87
Current account balance/GDP	-1.16	-0.55	1.08	-2.06	-3.98	0.83	-0.26	-0.37	-0.41	-0.46
Gross external financing needs/CAR&FXR	73.85	73.90	62.02	68.20	73.14	68.66	72.95	73.05	73.14	73.38
Narrow net external debt/CAR	22.17	13.69	18.57	30.09	33.40	36.19	34.05	31.71	29.98	28.66
GG balance/GDP	-1.96	-1.39	-8.31	-2.54	-1.43	-2.84	-2.70	-2.10	-2.00	-2.00
GG net debt/GDP	10.11	11.53	20.72	20.43	20.08	21.35	22.86	23.90	24.98	25.99
CPI inflation	1.32	2.14	1.83	3.98	7.88	6.27	2.32	2.28	2.13	2.02
Bank credit to resident private sector/GDP	43.51	44.30	54.49	50.50	46.21	43.63	44.14	44.36	44.68	45.17
e--Estimate.

Suriname (CCC+/Stable/C)

• Analyst: Julia.Smith@spglobal.com
• Latest publication: Republic of Suriname Foreign And Local Currency Ratings Raised To 'CCC+/C' From 'SD'; Outlook Stable, Dec. 6, 2023

Rating score snapshot

• Institutional assessment: 6
• Economic assessment: 6
• External assessment: 6
• Fiscal assessment – flexibility and performance: 6
• Fiscal assessment – debt burden: 6
• Monetary assessment: 6

Outlook: Stable

The stable outlook balances the government's commitment to fiscal reform and macroeconomic stabilization with the finalization of the debt restructuring and risks presented by developing institutions and weaknesses in governance, including debt management.

Downside scenario.  We could lower our ratings over the next six-12 months if expected financing from multilateral lending institutions failed to materialize, or if other policy or administrative developments raised the likelihood of another default.

Upside scenario.  We could raise our ratings over the next year if the government continues to progress on concluding restructuring agreements with its creditors, continues to make progress on its reform targets and meeting the conditions of multilateral lending institutions with which it has agreements, and develops a track record of strengthened debt management, and proactive economic policies that reduce the likelihood of another commercial debt payment default.

Table 29

Suriname
	2018	2019	2020	2021	2022	2023	2024e	2025e	2026e	2027e
GDP per capita (in ‘000)	6.77	7.12	6.83	5.40	5.79	5.67	6.83	7.23	7.66	8.09
GDP growth	4.95	1.17	-15.98	-2.44	2.43	2.10	3.00	3.00	3.00	3.00
GDP per capita growth	3.76	-0.17	-17.48	-3.64	1.06	0.89	1.78	1.78	1.78	1.78
Current account balance/GDP	-2.97	-10.54	6.25	5.29	2.11	4.48	-0.74	-0.01	0.77	0.66
Gross external financing needs/CAR&FXR	107.29	112.35	97.14	99.62	97.29	96.68	90.15	100.10	104.75	108.36
Narrow net external debt/CAR	57.97	78.12	68.60	60.32	47.73	36.83	48.84	51.36	50.91	49.15
GG balance/GDP	-9.92	-20.23	-11.96	-5.69	-2.69	-1.61	-1.08	-0.83	-0.81	-0.79
GG net debt/GDP	57.48	66.77	113.39	102.92	101.73	84.09	77.75	70.71	66.08	61.86
CPI inflation	5.44	4.22	60.74	60.69	54.56	53.30	30.90	17.10	11.90	11.90
Bank credit to resident private sector/GDP	27.33	26.04	28.07	21.21	23.14	18.75	19.00	19.19	19.40	19.60
e--Estimate.

Trinidad and Tobago (BBB-/Stable/A-3)

• Analyst: jennifer.love@spglobal.com
• Latest publication: (Full Analysis) Trinidad and Tobago, July 26, 2023

Rating score snapshot

• Institutional assessment: 3
• Economic assessment: 4
• External assessment: 3
• Fiscal assessment – flexibility and performance: 3
• Fiscal assessment – debt burden: 4
• Monetary assessment: 4

Outlook: Stable

The stable outlook indicates S&P Global Ratings' view that Trinidad and Tobago's economy will continue expanding over the next two years, and this will support government revenue collection and help stem the rise in government debt, while energy exports will support the country's external balances.

Downside scenario.  We could lower the rating over the next two years if GDP per capita fails to recover to the degree that we anticipate, and the pace of fiscal consolidation is materially slower than expected. Similarly, economic policies that contribute to a weakening of the long-term sustainability of public finances, limit the prospects for balanced GDP growth, or materially worsen the country's external position beyond our base-case scenario could also result in a lower rating.

Upside scenario.  We could raise the rating over the next 24 months if stronger economic performance and favorable long-term GDP growth prospects lead to a sustained decline in the government's debt burden and ease external pressures.

(Latest research update published on July 21, 2022)

Table 30

Trinidad and Tobago
	2018	2019	2020	2021	2022	2023	2024e	2025e	2026e	2027e
GDP per capita (in ‘000)	17.68	17.04	14.87	17.92	22.00	22.95	24.08	25.09	25.94	26.82
GDP growth	-0.60	0.36	-9.08	-1.04	1.48	2.50	1.70	1.70	1.70	1.70
GDP per capita growth	-1.02	-0.01	-9.37	1.29	1.58	2.19	1.40	1.40	1.40	1.40
Current account balance/GDP	6.62	4.29	-6.52	11.00	17.91	13.73	8.97	5.38	5.42	5.86
Gross external financing needs/CAR&FXR	60.24	67.94	83.06	59.37	60.81	61.40	67.39	69.65	72.40	74.20
Narrow net external debt/CAR	-55.61	-56.90	-89.65	-51.55	-29.01	-31.02	-29.37	-26.25	-20.42	-17.36
GG balance/GDP	-3.42	-2.51	-11.88	-7.46	0.66	-1.61	-1.95	-2.17	-2.48	-2.77
GG net debt/GDP	6.44	9.58	25.51	25.17	22.75	21.49	22.26	23.43	25.04	26.89
CPI inflation	1.02	1.00	0.60	2.06	5.83	4.63	3.90	2.80	2.00	2.00
Bank credit to resident private sector/GDP	45.34	49.86	56.07	47.90	41.38	42.68	42.34	42.08	41.87	41.66
e--Estimate.

Turks and Caicos Islands (BBB+/Positive/A-2)

• Analyst: jennifer.love@spglobal.com
• Latest publication: Turks and Caicos Islands Outlook Revised To Positive From Stable On Prospects For Improved Economic Resilience, March 27, 2024

Rating score snapshot

• Institutional assessment: 2
• Economic assessment: 4
• External assessment: 3
• Fiscal assessment – flexibility and performance: 1
• Fiscal assessment – debt burden: 1
• Monetary assessment: 6

Outlook: Positive

The positive outlook reflects S&P Global Ratings' view that TCI's economy will continue growing solidly, propelled by the tourism sector. If this growth materializes in line with our forecast, we could revise upward our economic assessment of TCI.

Downside scenario.  We could lower our ratings in the next two years if growth is weaker than we expect, leading to pressure on revenues that causes the government to run persistent fiscal deficits that materially weaken public finances. Similarly, an unexpected lessening of institutional ties with the U.K. that negatively affects governance, as shown in our institutional assessment of TCI, could result in a downgrade.

Upside scenario.  We could raise our ratings in the next two years if GDP growth is sustained in line with our expectations. As TCI maintains other strengths in its institutions, public sector finances, and debt, these would contribute to improved economic resilience.

Table 31

Turks and Caicos Islands
	2018	2019	2020	2021	2022	2023	2024e	2025e	2026e	2027e
GDP per capita (in ‘000)	31.77	31.94	20.62	26.80	30.05	33.18	34.46	35.63	36.62	37.51
GDP growth	91.14	4.98	-33.82	29.63	14.09	13.68	4.80	4.70	4.30	3.40
GDP per capita growth	83.83	1.11	-36.18	25.16	10.29	10.02	1.26	1.16	0.77	0.39
Current account balance/GDP	19.46	27.46	-2.87	15.85	27.50	25.84	24.85	23.80	22.69	21.51
Gross external financing needs/CAR&FXR	105.67	103.70	162.69	113.27	94.60	92.28	86.03	86.01	86.20	86.66
Narrow net external debt/CAR	-72.70	-53.79	-138.65	-145.67	-100.25	-102.80	-99.19	-96.26	-93.95	-92.39
GG balance/GDP	6.72	4.88	-6.72	10.92	5.55	4.53	1.21	1.30	1.15	1.17
GG net debt/GDP	-33.51	-37.43	-48.82	-47.04	-47.70	-50.31	-47.65	-45.51	-43.67	-42.27
CPI inflation	2.10	2.20	2.30	4.50	6.00	5.50	2.70	2.30	2.10	2.10
Bank credit to resident private sector/GDP	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A
e--Estimate. N/A--Not applicable.

U.S. (AA+/Stable/A-1+)

• Analyst: lisa.schineller@spglobal.com
• Latest publication: U.S. 'AA+/A-1+' Sovereign Ratings Affirmed; Outlook Remains Stable, March 27, 2024

Rating score snapshot

• Institutional assessment: 2
• Economic assessment: 1
• External assessment: 2
• Fiscal assessment – flexibility and performance: 5
• Fiscal assessment – debt burden: 6
• Monetary assessment: 1

Outlook: Stable

The stable outlook reflects the U.S.'s institutional checks and balances, strong rule of law, and free flow of information that contribute to stability and predictability in economic policies. The resilience of American institutions, its economy, and the size and depth of its financial market sustain the U.S. dollar's status as the world's premier reserve currency and support policy flexibility. Comparatively weak fiscal indicators that continue to constrain the sovereign credit rating offset those strengths.

Bipartisan cooperation to strengthen the U.S. fiscal profile--namely to meaningfully lower deficits and tackle budgetary rigidities--remains elusive. We expect that cross-party negotiations on contentious issues such as the government's debt ceiling--which has been raised or suspended on almost 90 occasions since 1960--will continue to be resolved when needed considering the severe consequences of not doing so on financial markets and on the economy.

Downside scenario.  We could lower the rating over the next two to three years if unexpected negative political developments weigh on the strength of American institutions and the effectiveness of long-term policymaking or jeopardize the dollar's status as the world's leading reserve currency. The ratings could also come under pressure if already-high deficits were to rise, owing to political inability to contain rising spending or to manage revenue implications of future changes in the tax code.

Upside scenario.  Conversely, we could raise the rating over the next two to three years if effective and proactive public policymaking results in improved fiscal performance that substantially reduces general government deficits and lowers the sovereign's debt burden. Sustained long-term GDP growth, along with fiscal adjustments, could diminish the recently high annual increases in the general government's net debt burden, strengthening creditworthiness.

Table 32

U.S.
	2018	2019	2020	2021	2022	2023	2024e	2025e	2026e	2027e
GDP per capita (in ‘000)	63.07	65.39	64.27	70.92	77.05	81.46	85.55	88.27	91.28	94.61
GDP growth	2.97	2.47	-2.21	5.80	1.94	2.54	2.48	1.74	1.80	1.91
GDP per capita growth	2.46	1.97	-3.00	5.52	1.49	2.01	1.94	1.12	1.29	1.49
Current account balance/GDP	-2.13	-2.05	-2.82	-3.68	-3.93	-3.31	-3.37	-3.52	-3.56	-3.64
Gross external financing needs/CAR&FXR	306.69	303.32	356.09	353.29	320.17	310.03	310.65	316.39	320.72	324.85
Narrow net external debt/CAR	313.23	337.88	427.57	392.18	326.66	335.95	361.32	374.85	383.72	388.90
GG balance/GDP	-5.49	-6.50	-15.74	-10.49	-4.09	-9.19	-6.15	-5.93	-5.80	-5.79
GG net debt/GDP	78.91	80.05	93.92	96.55	92.91	93.79	94.99	97.42	99.54	101.43
CPI inflation	2.44	1.81	1.23	4.70	8.00	4.12	3.02	2.04	2.09	2.12
Bank credit to resident private sector/GDP	153.61	153.39	164.79	160.49	155.66	149.93	149.93	149.93	149.93	149.93
e--Estimate.

Uruguay (BBB+/Stable/A-2)

• Analyst: carolina.caballero@spglobal.com
• Latest publication: (Full Analysis) Uruguay, May 2, 2024

Rating score snapshot

• Institutional assessment: 3
• Economic assessment: 3
• External assessment: 2
• Fiscal assessment – flexibility and performance: 5
• Fiscal assessment – debt burden: 3
• Monetary assessment: 5

Outlook: Stable

The stable outlook reflects our expectations that contained fiscal deficits under Uruguay's strengthened fiscal policy framework, along with moderate economic growth, will limit a rise in debt in 2024-2027. We expect investments across diverse sectors of the economy to support GDP growth of about 2.7% on average in 2024-2027.

Downside scenario.  We could lower the ratings over the next two years if fiscal execution unexpectedly slips and there's weaker government commitment to contain fiscal deficits. In this scenario, we would expect the net general government debt burden to rise to well above 60% of GDP. A sustained weaker long-term GDP growth trajectory could weigh on economic resilience and lead to a lower rating.

Upside scenario.  We could upgrade Uruguay in the next two years if we see a successful track record of lower inflation and a sustained decline in inflation expectations. This could support a more stable debt path, significantly reduce economic rigidities such as indexation, help expand private-sector credit, and deepen capital markets in local currency. Such developments could accelerate economic growth above our base case, and a deeper and well-capitalized financial system would strengthen Uruguay's monetary flexibility.

(Latest research update published on April 26, 2023)

Table 33

Uruguay
	2018	2019	2020	2021	2022	2023	2024e	2025e	2026e	2027e
GDP per capita (in ‘000)	19.04	18.12	15.62	17.67	20.68	22.42	23.66	24.68	25.71	26.87
GDP growth	0.16	0.93	-7.38	5.56	4.71	0.37	3.10	2.50	2.50	2.80
GDP per capita growth	0.09	0.85	-7.45	5.48	4.63	0.29	3.02	2.42	2.42	2.72
Current account balance/GDP	-0.41	1.28	-0.68	-2.42	-3.83	-3.62	-1.51	-2.07	-2.24	-2.31
Gross external financing needs/CAR&FXR	87.93	86.28	98.77	98.93	101.54	107.14	98.79	98.49	98.25	98.04
Narrow net external debt/CAR	27.76	31.46	26.42	20.24	24.65	30.19	30.00	29.02	28.23	30.72
GG balance/GDP	-1.91	-2.85	-4.96	-3.67	-2.76	-3.38	-3.40	-3.40	-3.40	-3.40
GG net debt/GDP	41.37	45.02	52.94	51.45	47.89	50.64	52.35	53.95	55.51	56.86
CPI inflation	7.96	8.79	9.41	7.96	8.30	5.11	5.50	5.90	5.80	5.80
Bank credit to resident private sector/GDP	25.45	25.62	28.14	26.96	26.67	29.42	30.71	32.25	32.41	32.51
e--Estimate.

Primary Credit Analyst:	Joydeep Mukherji, New York + 1 (212) 438 7351; joydeep.mukherji@spglobal.com
Secondary Contact:	Nicole Schmidt, Mexico City +52 5550814451; nicole.schmidt@spglobal.com