Fitch Affirms El Salvador 'B-' IDR; Outlook Revised to Negative

• Fitch Ratings has affirmed El Salvador's Long-Term Foreign- Currency Issuer Default Rating (IDR) at 'B-' and revises the Outlook to Negative from Stable.
• The Negative Rating Outlook reflects deterioration in debt sustainability metrics as a result of the widening of the fiscal deficit and economic contraction as well as financing constraints stemming from increased reliance on short-term debt, limited scope for additional local market financing and uncertain access to external market financing given high borrowing costs. However, multilateral funding can help ease borrowing constraints this year.
• The rating agency projects a deep economic contraction of 4.8% in 2020 due to the extended national quarantine to combat the coronavirus pandemic as well as 20% fall expected in remittances, representing nearly 20% of GDP,that will hit domestic demand sharply. However, its expects a strong rebound of 5% in 2021 but risks are to the downside in both 2020-2021.

(Source: Fitch)