S&P Global Ratings expects sovereign credit ratings in the Americas will largely remain stable in 2023 as economic growth remains low, inflation stays high, central banks maintain tight monetary policy, and governments cope with higher cost of funding. We have negative outlooks on the ratings on five regional sovereigns, indicating that erosion in credit quality is possible.

Through the first half of 2023, positive rating actions in the region slightly outweighed negative ones, with three upgrades, one positive outlook revision, and two downgrades. Meanwhile, we maintain stable outlooks on 80% of long-term ratings in the region, which is the highest share in a decade.

Rating Trends

Average credit quality has remained fairly stable this year. Including Canada and the U.S., which carry significant weight, the simple average sovereign rating in the Americas is above 'BB' and the GDP-weighted average is slightly above 'AA-'. Excluding Canada and the U.S., the simple average rating is 'BB', where it has hovered since recovering from the COVID-19 pandemic toward the end of 2021, and the GDP-weighted average is slightly above 'BB', still lower than before the pandemic (see chart 1).

S&P Global Ratings rates 14 of the 31 sovereigns in the Americas in the investment-grade category ('BBB-' or higher)--the same number since December 2016 (see chart 2). 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 Suriname ('SD', or selective default), Argentina ('CCC-'), and El Salvador ('CCC+').

The rating categories with the largest numbers of sovereigns are 'BBB' and 'B', with nine and eight, respectively. The 'BB' category was equal in size to the 'B' category in 2019, but as credit quality deteriorated during the pandemic years, the 'B' category became larger. The 'BBB' rating category has held the largest number of sovereign ratings in the region since mid-2012, though its total has fallen by one compared with the 2019 level. The majority of the sovereigns in the region have remained speculative-grade ('BB+' or lower) since 2016.

Rating Actions In 2023

In the first half of 2023, we lowered the long-term foreign currency ratings on two sovereigns and raised three:

• In February, we upgraded Costa Rica to 'B+' from 'B'.
• In March, we downgraded Argentina to 'CCC-' from 'CCC+' and Bolivia to 'B-' from 'B'.
• In April, we upgraded Guatemala to 'BB' from 'BB-' and Uruguay to 'BBB+' from 'BBB'.
• In May, we downgraded El Salvador to 'SD' and then upgraded it to 'CCC+' after it cured its default.

In addition to these rating actions, we revised the outlook on Brazil to positive from stable. Brazil is currently the only sovereign in the Americas with a positive rating outlook.

We maintain stable outlooks on 80% of the long-term ratings on sovereigns in the Americas. This is the largest share of stable outlooks in a decade, though at a lower average rating level. Investment-grade sovereigns with stable outlooks include Aruba, Bermuda, Canada, Chile, Curacao, the Falkland Islands, Mexico, Montserrat, Trinidad and Tobago, Turks and Caicos, the U.S., and Uruguay. We have negative outlooks on five sovereigns: Argentina, Panama, Peru, Honduras, and Bolivia.

Table 1

Americas 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-/Negative/C	6	5	6	6	5	6
Aruba	BBB/Stable/A-2	2	5	4	2	4	4
Bahamas	B+/Stable/B	4	4	6	4	6	4
Barbados	B-/Stable/B	5	5	6	4	5	6
Belize	B-/Stable/B	6	6	6	6	5	5
Bermuda	A+/Stable/A-1	2	2	3	1	4	5
Bolivia	B-/Negative/B	5	6*	6*	6	4*	5*
Brazil	BB-/Positive/B	4	5	2	6	6	3
Canada	AAA/Stable/A-1+	1	1	2	1	3	1
Chile	A/Stable/A-1	2	4	4	3	2	2
Colombia	BB+/Stable/B	3	4	5§	4	4	3
Costa Rica	B+/Stable/B	4	4	5	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-/Stable/B	6	5	6	4	3	6
El Salvador	CCC+/Stable/C	6*	5	5	6	6	6
Falkland Islands	A+/Stable/A-1	3	2	4	1	1	6
Guatemala	BB/Stable/B	4	5	2§	4	4	4
Honduras	BB-/Negative/B	5	5	2	6	4	4
Jamaica	B+/Stable/B	4	6	4	2	6	4
Mexico	BBB/Stable/A-2	3	5	2	3	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	3	4	3	4	5
Paraguay	BB/Stable/B	4	5	2	3	3	5
Peru	BBB/Negative/A-2	4	4	3	2	3	3
Suriname	SD/NM/SD	6	6	6	6	6	6
Trinidad and Tobago	BBB-/Stable/A-3	3	4	3	3	4	4
Turks and Caicos	BBB+/Stable/A-2	2	4	4	1	1	6
United States	AA+/Stable/A-1+	1	1	2	5	6	1
Uruguay	BBB+/Stable/A-2	3	3	2	5	3§	5
1 (%)		6.45	6.45	0.00	12.90	12.90	6.45
2 (%)		16.13	6.45	29.03	12.90	6.45	3.23
3 (%)		22.58	9.68	12.90	16.13	16.13	12.90
4 (%)		25.81	22.58	22.58	22.58	29.03	25.81
5 (%)		12.90	41.94	12.90	12.90	12.90	29.03
6 (%)		16.13	12.90	22.58	22.58	22.58	22.58
Median		4.00	5.00	4.00	4.00	4.00	4.00
Mean		3.66	4.24	3.89	3.75	3.93	4.31
Standard deviation		1.47	1.35	1.50	1.73	1.69	1.44
*Deterioration since January 2023. §Improvement since January 2023. SD--Selective default.

Table 2

Americas economic outlook
	Real GDP growth (%)		GG balance/GDP (%)		Net GG debt/GDP (%)		Currentaccount balance/GDP (%)		Narrow net external debt/CAR (%)
	2023f	2024f	2023f	2024f	2023f	2024f	2023f	2024f	2023f	2024f
Argentina	0.00	1.65	(3.08)	(1.80)	74.80	69.48	(1.78)	(1.43)	194.23	171.97
Aruba	2.00	0.50	(0.49)	(0.79)	50.63	49.14	8.85	6.57	(0.15)	3.31
Bahamas	2.50	1.40	(2.20)	(1.29)	74.14	72.47	(14.47)	(15.14)	58.94	58.89
Barbados	4.50	2.00	(1.65)	(1.76)	104.89	102.14	(7.11)	(6.64)	56.51	57.01
Belize	3.00	2.00	(1.58)	(2.66)	60.59	61.08	(5.79)	(5.19)	107.79	108.72
Bermuda	2.00	1.13	(1.06)	(1.04)	5.93	5.00	11.07	11.23	(64.58)	(66.65)
Bolivia	2.00	2.50	(5.44)	(4.72)	59.79	63.03	(1.66)	(1.45)	73.15	77.37
Brazil	1.73	1.50	(5.92)	(5.52)	56.85	59.76	(1.90)	(1.82)	3.14	(0.54)
Canada	0.82	1.51	(1.46)	(1.33)	46.79	46.65	(0.16)	0.28	102.79	109.40
Chile	0.30	2.40	(2.30)	(1.90)	29.97	30.26	(3.45)	(2.97)	73.82	72.80
Colombia	1.08	2.57	(4.39)	(4.40)	54.00	54.98	(3.34)	(2.71)	117.29	116.27
Costa Rica	2.60	3.20	(3.40)	(3.40)	60.33	59.90	(3.41)	(3.03)	50.07	51.29
Curacao	2.50	2.00	(4.98)	(4.97)	(27.08)	(24.81)	(23.91)	(22.91)	(41.82)	(33.66)
Dominican Republic	3.50	5.50	(3.69)	(3.47)	54.30	54.12	(3.96)	(3.72)	73.61	73.93
Ecuador	2.00	2.70	(2.30)	(2.00)	55.55	55.03	1.07	1.38	107.57	109.49
El Salvador	2.00	2.20	(3.70)	(3.45)	71.98	72.77	(4.54)	(3.80)	67.83	70.95
Falkland Islands	2.20	2.00	3.93	1.79	(134.62)	(136.51)	N/A	N/A	N/A	N/A
Guatemala	3.30	3.50	(1.69)	(1.83)	19.12	19.59	1.21	1.12	(29.36)	1.90
Honduras	3.00	3.60	(2.94)	(3.47)	46.43	48.52	(3.10)	(3.28)	10.01	15.76
Jamaica	2.20	1.55	0.44	0.63	60.50	57.48	(0.66)	(0.44)	57.45	55.21
Mexico	1.32	1.70	(3.32)	(3.10)	47.12	47.24	(0.89)	(0.49)	22.95	23.30
Montserrat	2.98	2.00	0.00	0.00	(2.16)	(0.52)	(17.93)	(17.95)	(163.92)	(163.70)
Nicaragua	3.00	3.50	(0.99)	(1.73)	43.35	42.50	(2.13)	(1.91)	69.66	66.37
Panama	4.50	4.50	(3.12)	(2.82)	43.20	43.39	(4.40)	(5.43)	96.39	88.84
Paraguay	5.00	3.30	(2.90)	(2.30)	24.61	25.63	0.51	(0.06)	32.23	28.61
Peru	1.98	2.76	(1.80)	(1.70)	22.89	23.75	(2.95)	(1.88)	31.22	29.39
Suriname	2.20	2.70	(12.01)	(10.86)	77.38	77.80	(6.27)	(3.32)	110.96	119.42
Trinidadand Tobago	2.50	1.70	(1.70)	(2.47)	25.63	26.08	10.04	1.77	(34.03)	(41.84)
Turksand Caicos	5.00	5.30	4.45	4.83	(45.11)	(46.21)	32.00	32.42	(61.27)	(58.97)
United States	0.85	1.20	(4.81)	(5.48)	95.94	98.03	(2.84)	(2.50)	348.25	360.21
Uruguay	1.00	3.00	(3.00)	(2.76)	49.90	51.35	(2.76)	(1.19)	36.80	37.84
f--forecast. GG--General government. CAR--Current account receipts. Source: S&P Global Ratings.

Latin America And The Caribbean: Modest Growth, More Debt, And Limited Political Maneuverability

Modest growth

The Latin American and Caribbean region suffered greater economic contraction during the pandemic years than other emerging markets and has shown a poorer long-term GDP growth rate (see chart 4). Its growth prospects remain modest amid higher interest rates, a large debt burden, and tighter monetary policy.

Fourteen of the 31 sovereigns in the Americas region have had below-average GDP growth compared with global peers at the same level of development--a negative factor in the credit ratings:

• Argentina
• Aruba
• The Bahamas
• Barbados
• Belize
• Bolivia
• Brazil
• Curacao
• Ecuador
• Jamaica
• Mexico
• Montserrat
• Suriname
• Trinidad and Tobago

More debt

Sovereigns in the region now carry a higher burden of government debt (see chart 5) than in pre-pandemic years, but for most the burden is lower than the peak in 2020 (except in Chile and Peru). Higher debt, combined with higher cost of funding, has raised the share of general government revenue that pays interest (see chart 6). The rise in interest burden is more notable in Colombia and Panama and less in Peru and Chile.

The risk posed by the debt burden partly depends on its composition. In general, sovereigns with more reliance on short-term debt and foreign currency debt are more vulnerable to sudden spikes in interest rates or depreciation of the currency. As shown in chart 7, highly rated sovereigns like the U.S. and Canada have almost no exposure to foreign currency debt, mitigating the interest rate risk they run from having a high rate of debt rollover (indicating a high amount of short-term debt) as a share of GDP. Similarly, relatively high debt rollover rates in Brazil and Mexico are mitigated by the high shares of sovereign debt denominated in local currency and held by domestic creditors.

Conversely, Colombia, Peru, and the Dominican Republic benefit from very low rollover rates but have much higher shares of debt denominated in foreign currency, making them vulnerable to higher debt service if their currency depreciates substantially. The low rating on Belize reflects, in part, its poor showings in both these indicators.

Limited political maneuverability

Low GDP growth prospects, persistent but stabilizing inflation rates, and difficult political conditions limit the ability of governments to address economic and social challenges. Adding to political challenges, legislatures in many countries are now playing more powerful roles, leading sometimes to greater pragmatism in policies and sometimes to greater paralysis and weak governance.

For example, more centrist legislatures have forced center-left presidents in Colombia and Brazil to moderate some policies to pass laws.

In Mexico, the center-left president enjoys a majority in both houses of Congress but lacks the two-thirds majority needed to pass constitutional amendments. Opposition from Congress, as well as from the judiciary, has limited the president's ability to make controversial changes in various aspects of governance.

In Brazil, the center-left president has to negotiate with a Congress dominated by parties that are more centrist than his own Workers' Party, leading to more moderation in economic policies.

Meanwhile, bitter clashes between the legislatures and the presidency have led to political instability in Ecuador and weak government in Peru.

Country Highlights In Latin America And The Caribbean

Mexico

Parts of Mexico, especially in the north, have benefited recently from new investment by firms that are shifting their supply chains to the country for exporting to the U.S. However, the new investment has not materially boosted Mexico's real per capita GDP, which we expect will grow less than 1% this year and in 2024. Domestic investment has remained weak, partly due to poor relations between the government and domestic private sector.

Failure to boost economic growth, or to undertake tax reforms that raise more money for the government, could contribute to gradual deterioration of the government's debt burden over the coming years, potentially damaging sovereign creditworthiness. The governing center-left Morena political party of President Andres Manuel Lopez Obrador faces a divided opposition before national elections in 2024.

Brazil

We recently revised the outlook on our 'BB-' rating on Brazil to positive, based on signs of greater certainty about fiscal and monetary policy that could benefit the country's still-low GDP growth prospects. Continued GDP growth plus the emerging framework for fiscal policy could result in a smaller government debt burden than expected.

The center-left administration of President Luiz Inacio Lula da Silva is likely to secure Congress' approval of a new law to set the framework of fiscal policy. The administration is also promoting simplification of federal, state, and municipal taxes to generate more revenue to help comply with the fiscal rule. We expect pragmatic economic policies from the administration, given its dependence on the largely centrist political parties that dominate Congress.

Colombia

The center-left administration of President Gustavo Petro is determined to make important economic and social changes but lacks a majority in Congress. Facing resistance to his policies, President Petro replaced several members of his cabinet in late April and regrouped his congressional coalition to accelerate the implementation of his proposed reforms to pensions, health care, and labor laws. The government recently announced a modestly larger fiscal deficit target for this year, which remains in line with targets set in Colombia's fiscal rule.

The challenge is next year: Adverse political developments could dampen private investment and limit the country's GDP growth rate, making it harder to meet fiscal targets in 2024 and stabilize the burden of government debt. Local elections later this year will provide important feedback to President Petro and his coalition partners in Congress, affecting the pace of change.

Chile

Chile enjoys more institutional and political stability than most Latin American countries, but its government suffered a setback recently when Congress rejected an ambitious tax reform designed to raise funds for more social spending. Center-left President Gabriel Boric's limited support in Congress makes it likely that a new tax reform, if approved, will raise less money than originally envisaged, limiting the government's ability to spend more on health, education, and public safety.

Chile recently elected delegates to a constitutional council to draft a new constitution, after the failure of such an effort in a referendum last year. The newly elected delegates, who are more conservative than those elected to the previous body in 2022, will draft a constitution that will be put to a referendum in December 2023.

Peru

Peruvian politics have become a bit more stable in recent months, despite the low popularity of both President Dina Boluarte and the national Congress. Peru's political leadership was unable to agree on early elections for both the executive branch and legislature following the removal of the former president, despite overwhelming public support for new polls. The Boluarte administration has limited political capital.

The leadership of the central bank and finance ministry has been able to maintain economic stability, limiting the negative spillover of political developments on the economy and public finances thus far. Our negative outlook reflects the risk that adverse developments reduce the predictability of policymaking, worsen institutional stability, and damage the economy.

Argentina

Argentina recently conducted its fifth peso-debt exchange since August 2022, which we classified as a distressed exchange. Political uncertainty will remain high as primary and national elections take place in August and October. The government has relied on debt exchanges to manage peaks in its peso debt maturity profile and thereafter conducted auctions to refinance smaller amounts of debt coming due. We will analyze any subsequent debt exchanges at this low rating level on a case-by-case basis, incorporating the macroeconomic and political context.

Ecuador

Political stalemate in Ecuador has led to early national elections scheduled in August, with a second round for the presidential election (if needed) slated for October. Ecuador's weak governability, which reflects regional and political divisions, continues to weigh on the sovereign rating. President Guillermo Lasso received only 20% of the vote in the first round of the presidential elections in 2021, and his party gained 12 out of 137 seats in the legislature, weakening his ability to govern. The risk remains that the next president may also receive a weak mandate and face a highly divided legislature, perpetuating weak governance. The recent events have not affected our already low rating but could, if they worsen, erode the country's fiscal stance and impair its capacity to service its debt.

Bermuda

Bermuda has recovered well from the COVID-19 pandemic but faces uncertainty related to proposed changes in global corporate taxes that could have negative implications for its public finances. The country has signed on to the Organization for Economic Cooperation and Development-led tax initiative, which would be a significant departure from its current tax regime that emphasizes payroll and customs duties. The government estimates the island's international business sector contributes more than $2 billion (more than 25%) to local GDP and $235 million in payroll taxes. The government has created an international tax working group to study its tax structure and revenue needs in the context of the proposed global minimum tax, and this group will report its findings in July 2023. We expect any changes resulting from tax reform will maintain the competitiveness of the economy and international business sector.

U.S. And Canada: Rancor And Stability

A sharply divided government, with each party narrowly controlling one house of Congress, has set the stage for political developments in the U.S. In early June, President Joe Biden signed legislation to suspend the government's statutory debt ceiling, which had become binding in January 2023. The law was approved after protracted negotiations between the president and House Speaker Kevin McCarthy on various fiscal and other policies, resulting in some modest fiscal measures. Suspension of the debt ceiling until January 2025 (after national elections two months earlier) will allow the U.S. Treasury to remain current on its debt service obligations. We expect political polarization, including legislative impasses in Congress, will remain high with national elections coming late next year.

Canada's national government is led by the Liberal party, which holds only a minority of seats in Parliament. The government relies on the votes of a smaller center-left party to pass legislation. In contrast with the U.S., in Canada the lack of a majority government has not led to material policy or legislative impasses.

Sovereign Summaries

Argentina (CCC-/Negative/C)

• Analyst: lisa.schineller@spglobal.com
• Latest publication: Argentina Long-Term Local Currency Rating Raised To 'CCC-' As Default Is Cured; 'CCC-' Foreign Currency Rating Affirmed, June 13, 2023

Ratings 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: Negative

The negative outlook on the long-term ratings is based on the risks surrounding pronounced economic imbalances and policy uncertainties before and after the 2023 national elections. Divisions within the government coalition, and infighting among the opposition, constrain the sovereign's ability to implement timely changes in economic policy.

Global capital markets are closed to Argentina. In the local market, swaps are being deployed to manage large peaks in maturities before utilizing traditional auctions to place debt. The central bank continues to play a key role as a backstop for local debt management in the secondary market, including offering put options to banks for government debt maturing in 2024 and 2025.

Downside scenario.  We could lower the ratings over the next six to 12 months on unexpected negative policy or political developments that undermine already limited access to financing--complicated even further by the severe drought. Particularly, setbacks under the Extended Fund Facility (EFF) could reduce access to IMF financing, and potentially to other multilateral lending institutions. This scenario would likely weigh on modest commercial foreign currency debt servicing. It would also further reduce local investor confidence and access to peso-denominated debt markets--exacerbating the risks associated with recourse to central bank financing amid triple-digit inflation. As a result, we could lower the ratings.

Heightened pressure in local financial markets, including the banking system's deposit base, or difficulties in managing central bank debt (LELIQs) could also lead to a downgrade.

Finally, at such low rating levels, we generally consider debt exchanges as distressed and tantamount to a default.

Upside scenario.  We could raise the ratings over the next six to 12 months following:

• A track record of successful execution under the EFF, and
• Clarity on how policy will ease financing challenges in the local market and provide a road map to address Argentina's major structural macroeconomic imbalances.

We could also raise the ratings if there is a more pronounced economic recovery that supports stronger fiscal outcomes that take pressure off the government's financing needs.

Table 3

Argentina
(%)	2017	2018	2019	2020	2021	2022	2023e	2024e	2025e	2026e
GDP per capita (000)	14.61	11.80	10.00	8.50	10.58	13.65	14.12	14.02	14.00	14.70
GDP growth	2.82	(2.62)	(5.09)	(7.01)	10.40	5.24	0.00	1.65	1.83	2.07
GDP per capita growth	1.76	(3.60)	(6.03)	(7.91)	9.36	4.27	(0.99)	0.65	0.82	1.06
Current account balance/GDP	(4.84)	(5.16)	(0.78)	0.81	1.38	(0.60)	(1.78)	(1.43)	(2.06)	(1.90)
Gross external financing needs/CAR & FXR	149.55	127.33	113.69	124.58	135.87	139.76	151.36	146.88	149.90	146.11
Narrow net external debt/CAR	185.15	208.41	229.22	273.16	203.76	167.26	194.23	171.97	171.76	155.64
GG balance/GDP	(6.67)	(5.73)	(1.60)	(7.80)	(4.07)	(1.83)	(3.08)	(1.80)	(1.45)	(1.45)
GG net debt/GDP	49.31	74.83	84.10	95.51	72.08	77.45	74.80	69.48	63.23	54.80
CPI inflation	24.80	47.65	53.83	36.14	50.94	94.79	97.91	84.97	65.00	47.50
Bank credit to resident private sector/GDP	15.10	14.52	11.50	11.87	9.83	9.09	8.82	8.16	7.18	7.05
e--Estimate. CAR--Current account receipt. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

Aruba (BBB/Stable /A-2)

• Analyst: julia.smith@spglobal.com
• Latest publication: Full Analysis: Aruba, March 21, 2023

Ratings score snapshot

• Institutional assessment: 2
• Economic assessment: 5
• External assessment: 4
• Fiscal assessment – Flexibility and performance: 2
• Fiscal assessment – Debt burden: 4
• Monetary assessment: 4

Outlook: Stable

The stable outlook balances our expectation that it will take time for the debt accumulated during the pandemic to decline, as the external macroeconomic environment weakens, with our assumption of continued stability in the bilateral relationship between Aruba and the Netherlands. This, coupled with successful implementation of Aruba's reform package, will likely lead to lower debt and more favorable fiscal outcomes over time.

Downside scenario.  We could lower the ratings over the next two years if there are difficulties in implementing the reforms agreed upon with the Netherlands to stabilize the government's fiscal outcomes, leading to persistently large government deficits and higher debt beyond our current base-case expectations. If these issues weakened the bilateral relationship, signaling an erosion of institutional strength, we could also lower the ratings by one or more notches.

Upside scenario.  We could raise the ratings over the next two years if the pace of the recovery significantly exceeds our expectations and Aruba's GDP per capita improves markedly. This, together with the achievement of more sustainable public finances, potentially due to successful implementation of the reforms envisioned in the agreement reached with the Netherlands, leading to more substantial declines in net debt, could result in an upgrade.

(Originally from research update published March 15, 2021)

Table 4

Aruba
(%)	2017	2018	2019	2020	2021	2022	2023e	2024e	2025e	2026e
GDP per capita (000)	28.45	29.41	31.30	23.78	27.90	30.47	33.72	35.00	35.79	36.61
GDP growth	5.48	5.25	0.65	(18.59)	17.16	9.60	2.00	0.50	1.00	1.50
GDP per capita growth	5.48	5.06	0.37	(18.14)	18.14	8.84	1.29	(0.20)	0.30	0.79
Current account balance/GDP	0.20	(0.73)	2.68	(12.41)	3.89	23.49	8.85	6.57	5.87	5.18
Gross external financing needs/CAR & FXR	111.28	110.30	104.93	132.34	107.09	95.26	102.40	112.58	117.96	123.35
Narrow net external debt/CAR	(2.65)	(1.29)	(1.07)	5.17	(4.73)	(3.50)	(0.15)	3.31	5.91	7.72
GG balance/GDP	0.38	(0.32)	4.60	(14.29)	(5.24)	(3.81)	(0.49)	(0.79)	0.28	1.08
GG net debt/GDP	36.86	36.67	32.67	56.64	55.78	55.96	50.63	49.14	47.30	44.67
CPI inflation	(1.03)	3.63	3.60	(3.10)	3.60	5.50	4.50	4.00	2.00	1.50
Bank credit to resident private sector/GDP	57.25	57.26	58.41	78.59	65.08	65.08	65.08	65.08	65.08	65.08
e--Estimate. CAR--Current account receipt. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

The Bahamas (B+/Stable/B)

• Analyst: alexis.smith-juvelis@spglobal.com
• Latest publication: The Commonwealth of The Bahamas 'B+' Ratings Affirmed; Outlook Stable, Nov. 22, 2022

Ratings 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 reduce pressure on government expenditures, leading to smaller fiscal deficits over the next 12 months. The stable outlook also assumes no material adverse impact on the Bahamas, including to the local banking sector, from the recent bankruptcy of FTX, a crypto-currency exchange with a presence in the country. We expect continued, but decelerating, growth in the national debt. We expect the country's relatively large financing needs will be met by the domestic market and multilateral lenders.

Downside scenario.  We could lower the ratings over the next 12 months should economic performance lag, pointing to GDP per capita remaining below our expectations. We could also lower the ratings if we believe that the Bahamas' access to external liquidity will deteriorate sharply and suddenly.

Upside scenario.  We could raise the ratings over the next 12 months if the government advances faster than we expect to establish a track record of enacting meaningful financial reform, demonstrating an ability to raise revenues and leading to sustained near-balanced financial results and improved economic prospects.

Table 5

Bahamas
(%)	2017	2018	2019	2020	2021	2022	2023e	2024e	2025e	2026e
GDP per capita (000)	32.10	32.81	33.53	24.81	29.63	32.73	34.75	35.72	36.79	37.89
GDP growth	2.52	2.92	(0.74)	(23.51)	16.98	14.37	2.50	1.40	1.40	1.40
GDP per capita growth	1.50	1.88	(1.73)	(24.24)	18.26	12.92	1.47	0.39	1.40	1.40
Current account balance/GDP	(13.49)	(9.48)	(2.15)	(23.42)	(21.11)	(13.68)	(14.47)	(15.14)	(15.69)	(16.24)
Gross external financing needs/CAR & FXR	327.58	263.75	207.98	519.18	340.54	267.33	276.66	327.02	323.87	323.93
Narrow net external debt/CAR	48.94	40.13	22.12	126.88	68.79	52.06	58.94	58.89	56.36	53.85
GG balance/GDP	(3.46)	(1.79)	(6.51)	(15.53)	(6.83)	(2.84)	(2.20)	(1.29)	(0.77)	(0.76)
GG net debt/GDP	48.18	47.61	47.11	82.63	77.88	77.51	74.14	72.47	70.66	68.90
CPI inflation	1.52	2.27	2.49	0.04	2.90	5.61	4.75	2.40	1.60	1.60
Bank credit to resident private sector/GDP	50.38	49.48	47.64	60.59	50.31	44.89	42.22	41.02	40.16	39.32
e--Estimate. CAR--Current account receipt. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

Barbados (B-/Stable/B)

• Analyst: julia.smith@spglobal.com
• Latest publication: Full Analysis: Barbados, Nov. 23, 2022

Ratings score snapshot

• Institutional assessment: 5
• Economic assessment: 5
• External assessment: 6
• Fiscal assessment – Flexibility and performance: 4
• Fiscal assessment – Debt burden: 5
• Monetary assessment: 6

Outlook: Stable

The stable outlook reflects S&P Global Ratings' view that despite difficult global economic conditions, Barbados' new IMF program, underpinned by its domestic 2022 BERT program, will facilitate access to financing from multilateral institutions. At the same time, high reserves will continue to provide external liquidity to support Barbados' balance-of-payment position.

Downside scenario.  We could lower our ratings in the next year if the impact of external conditions leads to larger 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 the risks of global external conditions to the economy and government finances diminish sooner than expected, combined with strengthening confidence in government policymaking, which contributes to improved GDP growth prospects and supports primary balance surpluses and improved monetary transmission mechanisms. Higher economic growth would facilitate a reduced debt burden, which, together with an expectation of continued access to official funding, could lead to an upgrade.

(Originally from research update published Sept. 23, 2022)

Table 6

Barbados
(%)	2017	2018	2019	2020	2021	2022	2023e	2024e	2025e	2026e
GDP per capita (000)	17.40	17.78	18.55	16.26	16.84	19.74	21.53	22.37	23.24	24.15
GDP growth	0.58	(1.00)	(0.20)	(13.50)	(0.30)	10.02	4.50	2.00	2.00	2.00
GDP per capita growth	0.43	(1.14)	(0.33)	(13.61)	(0.42)	9.89	4.37	1.88	1.88	1.88
Current account balance/GDP	(3.82)	(4.39)	(2.76)	(6.00)	(11.20)	(11.07)	(7.11)	(6.64)	(6.28)	(6.28)
Gross external financing needs/CAR & FXR	230.79	236.48	199.40	276.29	225.11	214.46	179.16	153.32	152.73	156.02
Narrow net external debt/CAR	65.77	84.17	67.93	91.45	89.25	60.82	56.51	57.01	59.87	62.18
GG balance/GDP	(3.20)	(0.30)	3.61	(4.60)	(5.06)	(1.89)	(1.65)	(1.76)	(1.38)	(1.24)
GG net debt/GDP	137.60	115.33	108.60	125.81	131.07	113.18	104.89	102.14	99.04	95.84
CPI inflation	4.66	3.67	4.10	0.50	1.50	5.00	4.50	2.00	2.00	2.00
Bank credit to resident private sector/GDP	88.11	84.28	80.84	91.41	88.01	77.81	72.03	70.87	69.92	67.21
e--Estimate. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

Belize (B-/Stable/B)

• Analyst: fernanda.nieto@spglobal.com
• Latest publication: Belize 'B-/B' Ratings Affirmed; Outlook Remains Stable, Aug. 19, 2022

Ratings 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 balances continued economic recovery with high inflation, weak external liquidity, and risks related to still-high government debt. We expect the government will make gradual progress strengthening public finances over the next 12 months.

Downside scenario.  We could lower the ratings over the next six to 24 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 recent sovereign debt restructuring, combined with poor external liquidity and a still-high debt burden, could eventually weaken the government's liquidity, leading to a downgrade.

Upside scenario.  We could raise the ratings over the next 12-18 months if we see a track record of strengthening economic and fiscal results and sustainable improvement in external liquidity. Successful implementation of fiscal measures resulting in consistent debt reduction, and better GDP growth and long-term economic prospects, could lead to an upgrade.

Table 7

Belize
(%)	2017	2018	2019	2020	2021	2022	2023e	2024e	2025e	2026e
GDP per capita (000)	5.84	5.74	5.83	4.88	5.83	6.34	6.57	6.64	6.73	6.82
GDP growth	(0.98)	0.34	4.55	(13.68)	19.34	4.00	3.00	2.00	2.00	2.00
GDP per capita growth	(3.51)	(1.69)	1.32	(16.34)	16.29	1.36	0.39	(0.58)	(0.58)	(0.58)
Current account balance/GDP	(6.36)	(6.95)	(7.76)	(6.22)	(6.26)	(9.20)	(5.79)	(5.19)	(5.20)	(4.33)
Gross external financing needs/CAR & FXR	139.14	136.75	134.64	151.44	143.81	141.50	144.97	150.07	154.06	154.85
Narrow net external debt/CAR	81.60	78.32	80.67	122.92	109.63	99.10	107.79	108.72	111.24	111.81
GG balance/GDP	(1.17)	(0.88)	(3.76)	(8.82)	0.08	(1.05)	(1.58)	(2.66)	(3.47)	(4.26)
GG net debt/GDP	71.53	71.70	70.42	89.88	66.53	61.37	60.59	61.08	62.22	64.09
CPI inflation	1.11	0.30	0.20	0.10	3.22	7.50	3.37	1.72	1.96	1.96
Bank credit to resident private sector/GDP	44.56	46.66	47.08	56.09	46.59	44.39	44.40	44.42	44.43	44.45
e--Estimate. CAR--Current account receipt. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

Bermuda (A+/Stable/A-1)

• Analyst: jennifer.love@spglobal.com
• Latest publication: Full Analysis: Bermuda, May 9, 2023

Ratings 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 economic recovery underway in Bermuda will continue during the forecast horizon and assumes no negative impact from any possible changes in global regulatory or taxation regimes on Bermuda's international financial sector (IFS). We expect a fiscal deficit of 1.5% of GDP, in line with the government's budget this year. We assume that a combination of GDP growth, recovering revenues, and a commitment to fiscal consolidation will lead to falling fiscal deficits, and reduce the government's net debt burden.

Downside scenario.  Unexpected weakness in Bermuda's IFS sector, as a result of sector uncertainty, or changes in global regulation or taxation that weaken the territory's external position, public finances, and growth trajectory could lead to a downgrade. Similarly, a failure to improve government finances leading to sustained fiscal deficits and an increased interest burden, or a fall in the government's large liquid assets to less than 25% of GDP on a sustained basis, would weaken Bermuda's fiscal assessment. Under either scenario, we could lower the ratings over the next two years.

Upside scenario.  We could raise the ratings if the territory returns to more robust real GDP growth on a sustained basis, potentially through greater economic diversification. That, in turn, could result in persistently improved public finances that lead to a strengthened debt profile particularly a lower interest-to-revenue ratio. However, we believe that such a scenario will likely take longer than our two-year outlook horizon.

(Originally from research update published Aug. 12, 2020)

Table 8

Bermuda
(%)	2017	2018	2019	2020	2021	2022	2023e	2024e	2025e	2026e
GDP per capita (000)	110.91	112.28	117.45	105.43	111.59	118.75	125.88	130.08	133.23	136.48
GDP growth	3.61	(0.43)	0.31	(6.84)	5.41	0.58	2.00	1.13	1.02	1.13
GDP per capita growth	3.46	(0.43)	0.32	(6.80)	5.80	0.68	2.10	1.24	1.12	1.23
Current account balance/GDP	12.10	13.18	10.97	12.67	13.53	14.86	11.07	11.23	11.45	11.43
Gross external financing needs/CAR & FXR	332.30	319.28	208.87	225.29	189.25	173.07	175.16	173.07	171.14	170.79
Narrow net external debt/CAR	(59.35)	(57.34)	(55.97)	(83.22)	(80.61)	(58.28)	(64.58)	(66.65)	(68.18)	(71.00)
GG balance/GDP	(1.20)	(1.72)	(4.61)	(5.96)	(1.56)	(1.62)	(1.06)	(1.04)	(1.02)	(1.00)
GG net debt/GDP	(1.72)	0.56	1.43	3.11	4.54	7.21	5.93	5.00	4.15	3.18
CPI inflation	1.90	1.40	1.00	0.03	1.50	4.00	3.90	2.10	1.30	1.20
Bank credit to resident private sector/GDP	120.09	110.34	116.43	128.05	122.74	119.57	113.46	110.43	108.45	106.49
e--Estimate. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

Bolivia (B-/Negative/B)

• Analyst: carolina.caballero@spglobal.com
• Latest publication: Bolivia Long-Term Ratings Lowered To 'B-' From 'B' On Worsening External Liquidity; Outlook Negative, April 19, 2023

Ratings score snapshot

• Institutional assessment: 5
• Economic assessment: 6
• External assessment: 6
• Fiscal assessment – Flexibility and performance: 6
• Fiscal assessment – Debt burden: 4
• Monetary assessment: 5

Outlook: Negative

The negative outlook indicates the risk of further worsening of external liquidity, which could undermine economic stability. Political disagreements, including within the governing coalition, raise questions about the government's ability to secure timely approval of new loans from Congress that, along with other measures, could support external liquidity and strengthen public confidence.

Downside scenario.  We could lower the ratings over the next 12 months if continued political stalemate limits the government's ability to stabilize and reverse the decline in external liquidity that, if unchecked, could pose greater risk to economic and monetary stability. Further erosion in the availability of foreign exchange to meet debt service and other needs could have an abrupt negative impact on the economy, resulting in a downgrade.

Upside scenario.  We could stabilize the rating at its current level in the next 12 months if we see policy steps and other developments 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 sources of liquidity and to correct the still large fiscal deficits and, thereby, curtail the government's high financing needs.

Table 9

Bolivia
(%)	2017	2018	2019	2020	2021	2022	2023e	2024e	2025e	2026e
GDP per capita (000)	3.35	3.55	3.55	3.14	3.41	3.66	3.68	3.62	3.59	3.61
GDP growth	4.20	4.22	2.22	(8.74)	6.11	3.48	2.00	2.50	2.50	2.50
GDP per capita growth	2.65	2.65	0.80	(10.03)	4.63	2.06	0.62	1.12	1.13	1.14
Current account balance/GDP	(5.06)	(4.28)	(3.34)	(0.08)	2.16	(0.34)	(1.66)	(1.45)	(1.57)	(1.28)
Gross external financing needs/CAR & FXR	67.08	66.12	68.51	64.72	71.78	87.28	91.89	96.28	97.77	97.62
Narrow net external debt/CAR	(22.72)	(1.58)	37.45	74.71	58.41	58.55	73.15	77.37	80.32	81.47
GG balance/GDP	(5.03)	(5.97)	(6.91)	(13.07)	(8.46)	(5.83)	(5.44)	(4.72)	(4.00)	(3.85)
GG net debt/GDP	22.06	26.18	30.71	46.45	52.27	55.21	59.79	63.03	64.87	66.35
CPI inflation	2.82	2.27	1.84	0.94	0.74	1.75	3.00	3.00	3.00	3.00
Bank credit to resident private sector/GDP	60.13	62.84	66.71	77.77	73.36	72.81	73.48	74.16	74.16	74.16
e--Estimate. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

Brazil (BB-/Positive/B)

• Analyst: manuel.orozco@spglobal.com
• Latest publication: Brazil Outlook Revised To Positive On Expectations For Policy Pragmatism; 'BB-/B' Ratings Affirmed, June 14, 2023

Ratings 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: Positive

The positive outlook reflects signs of greater certainty about stable fiscal and monetary policy that could benefit Brazil's still-low GDP growth prospects. Continued GDP growth plus the emerging framework for fiscal policy could result in a smaller government debt burden than expected, which could support monetary flexibility and sustain the country's net external position. Such developments would reinforce our view of the resilience of Brazil's institutional framework, with stable policymaking based on extensive checks and balances across the executive, legislative, and judicial branches of government.

Downside scenario.  We could revise our outlook to stable within the next two years if an inadequate policy framework or poor implementation results in limited economic growth, leading to further fiscal deterioration and a higher-than-expected debt burden. A deterioration in policy signaling could also affect foreign direct investment inflows and, thereby, weaken Brazil's strong net external position.

Upside scenario.  We could raise our ratings over the next two years if Brazilian governing institutions are able to implement pragmatic economic policy that contains vulnerabilities in the country's public finances and sets the stage for better GDP growth. Key to this would be passage of additional reforms--among them a tax reform currently under debate.

Table 10

Brazil
(%)	2017	2018	2019	2020	2021	2022	2023e	2024e	2025e	2026e
GDP per capita (000)	9.90	9.12	8.85	6.92	7.70	8.92	9.66	10.02	10.37	10.79
GDP growth	1.32	1.78	1.22	(3.28)	4.99	2.90	1.73	1.50	1.84	1.93
GDP per capita growth	0.52	0.98	0.45	(3.92)	4.44	2.43	1.21	0.93	1.30	1.41
Current account balance/GDP	(1.23)	(2.86)	(3.63)	(1.91)	(2.81)	(2.91)	(1.90)	(1.82)	(1.74)	(1.49)
Gross external financing needs/CAR & FXR	64.54	67.45	70.50	65.87	71.59	75.25	76.74	78.12	78.31	77.58
Narrow net external debt/CAR	(7.60)	(9.22)	(6.46)	(11.55)	2.31	7.73	3.14	(0.54)	(4.63)	(8.87)
GG balance/GDP	(8.39)	(6.90)	(4.92)	(11.75)	(2.26)	(3.77)	(5.92)	(5.52)	(5.57)	(5.52)
GG net debt/GDP	56.44	56.41	54.36	66.67	56.83	52.28	56.85	59.76	62.20	64.53
CPI inflation	3.46	3.66	3.74	3.21	8.29	9.34	5.19	4.24	3.78	3.60
Bank credit to resident private sector/GDP	53.58	51.23	51.76	58.55	58.48	60.01	60.48	61.58	62.77	64.04
e--Estimate. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

Canada (AAA/Stable/A-1+)

• Analyst: julia.smith@spglobal.com
• Latest publication: Full Analysis: Canada, April 19, 2023

Ratings 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, economic diversification, and ample fiscal and monetary buffers will help it to weather slowing economic growth this year, and leave it well positioned to face future negative shocks.

Downside scenario.  We could lower the ratings over the next two years if Canada's fiscal or debt position weakens substantially, without positive signals from the government about future corrective actions, and if this is accompanied by unexpected poor economic performance. We could also lower the ratings should a much weaker fiscal position be accompanied by a substantial and sustained weakening in Canada's net external position, raising external vulnerabilities.

(Originally from research update published April 28, 2022)

Table 11

Canada
(%)	2017	2018	2019	2020	2021	2022	2023e	2024e	2025e	2026e
GDP per capita (000)	45.13	46.55	46.37	43.35	52.36	54.97	54.76	56.36	59.30	61.55
GDP growth	3.04	2.78	1.89	(5.07)	5.01	3.40	0.82	1.51	1.80	1.99
GDP per capita growth	1.81	1.34	0.44	(6.09)	4.41	1.53	(0.27)	0.42	0.70	0.89
Current account balance/GDP	(2.80)	(2.38)	(1.95)	(2.15)	(0.27)	(0.39)	(0.16)	0.28	1.14	1.28
Gross external financing needs/CAR & FXR	154.74	150.12	154.07	177.65	190.67	182.47	167.76	168.61	166.09	168.81
Narrow net external debt/CAR	121.36	103.92	116.06	127.56	102.00	96.47	102.79	109.40	112.60	118.52
GG balance/GDP	0.82	1.19	0.68	(10.76)	(2.95)	0.28	(1.46)	(1.33)	(1.03)	(0.65)
GG net debt/GDP	40.35	40.30	38.72	53.63	50.99	46.66	46.79	46.65	46.09	45.09
CPI inflation	1.60	2.24	1.96	0.72	3.41	6.80	3.65	1.73	2.11	1.98
Bank credit to resident private sector/GDP	171.83	174.02	175.03	192.68	183.15	176.58	178.76	178.95	179.10	178.92
e--Estimate. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

Chile (A/Stable/A-1)

• Analyst: manuel.orozco@spglobal.com
• Latest publication: Chile 'A/A-1' Foreign Currency Ratings Affirmed; Outlook Remains Stable, Oct. 21, 2022

Ratings 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: Stable

While the constitutional debate continues, we expect Chile's economic policy to gradually advance in addressing social tensions and the shortcomings of its economic model over the next 24 months. This will also help sustain economic growth over time. Restoring macroeconomic fundamentals will prevent further deterioration of Chile's external position.

Downside scenario.  Over the next 24 months, we could lower our ratings if persistent political uncertainty stalls policy implementation and hinders economic growth. Moreover, persistently higher-than-expected current account deficits, translating into a fast buildup of external debt and financing needs, could also lead to a downgrade.

Upside scenario.  We could raise our ratings over the next 24 months if Chile's economic growth prospects strengthen as a result of proper policy implementation. Stronger growth, added to prudent fiscal management, could help Chile regain fiscal and external buffers recently used to withstand the impact of the pandemic and social upheaval.

Table 12

Chile
(%)	2017	2018	2019	2020	2021	2022	2023e	2024e	2025e	2026e
GDP per capita (000)	15.00	15.75	14.58	13.02	16.08	15.16	17.57	17.92	18.37	19.08
GDP growth	1.36	3.99	0.77	(6.26)	11.93	2.50	0.30	2.40	2.80	2.90
GDP per capita growth	(0.03)	2.15	(1.11)	(7.96)	10.68	1.73	(0.36)	1.76	2.19	2.31
Current account balance/GDP	(2.76)	(4.49)	(5.21)	(1.67)	(6.45)	(9.02)	(3.45)	(2.97)	(2.93)	(2.88)
Gross external financing needs/CAR & FXR	111.14	119.50	120.90	121.39	122.06	121.19	118.95	115.01	113.40	112.11
Narrow net external debt/CAR	36.33	44.67	59.64	76.43	85.11	82.50	73.82	72.80	70.99	68.91
GG balance/GDP	(2.63)	(1.48)	(2.73)	(7.11)	(7.50)	1.36	(2.30)	(1.90)	(1.50)	(1.30)
GG net debt/GDP	10.92	13.04	15.32	22.30	30.37	29.68	29.97	30.26	30.18	29.76
CPI inflation	2.18	2.43	2.55	2.43	4.52	11.60	7.91	3.70	3.30	2.96
Bank credit to resident private sector/GDP	82.77	86.88	92.87	93.89	86.37	87.76	86.81	87.44	88.07	88.90
e--Estimate. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

Colombia (BB+/Stable/B)

• Analyst: joydeep.mukherji@spglobal.com
• Latest publication: Colombia 'BB+/B' Foreign Currency Ratings Affirmed; Outlook Remains Stable, Jan. 20, 2023

Ratings 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: Stable

The stable outlook indicates our expectation that fiscal adjustment and continued economic growth over the next two to three years will stabilize net general government at just below 60% of GDP and curtail recent large current account deficits (CADs). Moreover, we expect broad continuity in fiscal, monetary, and pro-growth economic policies as the administration of President Gustavo Petro implements its ambitious social reforms.

Downside scenario.  We could downgrade Colombia during the next two years if economic growth is below our expectations, potentially indicating less economic resilience or weaker investor confidence that affects private investment. We could also lower the rating if unexpected fiscal slippage contributes to a higher sovereign debt burden or if persistently large CADs worsen its already weak external profile.

Upside scenario.  Conversely, we could upgrade Colombia during the next 12-24 months if economic growth is consistently and significantly faster than expected, 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 improve Colombia's weak external profile. That, along with smaller fiscal deficits that strengthen public finances by containing the annual growth of the general government's debt burden, could lead to an upgrade.

Table 13

Colombia
(%)	2017	2018	2019	2020	2021	2022	2023e	2024e	2025e	2026e
GDP per capita (000)	6.58	6.93	6.54	5.36	6.24	6.67	6.62	6.98	7.29	7.55
GDP growth	1.36	2.56	3.19	(7.25)	11.02	7.50	1.08	2.57	3.02	2.99
GDP per capita growth	0.10	0.78	0.81	(9.05)	9.54	6.33	0.02	1.53	2.00	1.09
Current account balance/GDP	(3.18)	(4.20)	(4.58)	(3.46)	(5.64)	(6.23)	(3.34)	(2.71)	(2.51)	(2.30)
Gross external financing needs/CAR & FXR	94.62	98.81	99.86	93.68	96.85	104.20	101.85	100.87	100.47	99.60
Narrow net external debt/CAR	114.78	113.80	116.72	171.69	145.35	116.10	117.29	116.27	112.56	105.81
GG balance/GDP	(2.32)	(1.95)	(1.88)	(7.32)	(6.92)	(6.42)	(4.39)	(4.40)	(4.25)	(4.24)
GG net debt/GDP	37.89	41.21	43.25	55.89	56.19	56.10	54.00	54.98	55.95	56.87
CPI inflation	4.32	3.24	3.50	2.54	3.49	10.15	11.00	4.28	3.42	2.98
Bank credit to resident private sector/GDP	52.73	51.14	51.41	55.88	51.65	48.09	46.83	47.65	48.66	49.90
e--Estimate. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

Costa Rica (B+/Stable/B)

• Analyst: lisa.schineller@spglobal.com
• Latest publication: Costa Rica Long-Term Ratings Raised To 'B+' On Solid Fiscal Results; Outlook Stable, Feb. 23, 2023

Ratings score snapshot

• Institutional assessment: 4
• Economic assessment: 4
• External assessment: 5
• 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 slightly and growth to slow given the global backdrop. We believe maintaining access to official financing--including disbursements under the IMF's Extended Fund Facility and newly created Resilience and Sustainability Fund (RSF)--amid challenging and uncertain global economic conditions is key to funding flexibility and confidence in the local and global capital markets. Costa Rica is the first country approved for access to the RSF, which is designed to bolster resilience for climate change.

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 at around 9.5% of GDP this year and next. Success in tapping global capital markets on favorable terms this year would likely be predicated on signals of continued fiscal commitment and compliance with IMF reviews.

If policy setbacks occur, recourse to the central bank or other unconventional financing could cause us to view the country's institutional framework and ability to support public finances less favorably--despite widespread checks and balances and a solid democratic tradition--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 maintain fiscal measures that have supported deficit reduction. Success thus far has stemmed from implementation of the 2018 reform. The public employment reform due to come into effect this year is expected to play a role. Such steps would likely underpin investor confidence, and sustain access to the local market and external (official and capital market) borrowing. In the complex global climate, Costa Rica appears to be benefiting from nearshoring or friend-shoring. Strength in foreign direct investment and exports, associated with special trade zones and tourism, could reduce the country's external vulnerability, supporting growth and fiscal performance. These factors could lead to an upgrade.

Table 14

Costa Rica
(%)	2017	2018	2019	2020	2021	2022	2023e	2024e	2025e	2026e
GDP per capita (000)	12.19	11.93	13.11	11.74	12.14	14.27	14.81	14.94	15.21	15.54
GDP growth	4.16	2.62	2.42	(4.27)	7.78	4.31	2.60	3.20	3.30	3.30
GDP per capita growth	2.96	1.47	1.35	(5.26)	6.71	3.32	1.50	2.10	2.20	2.20
Current account balance/GDP	(3.62)	(3.12)	(1.24)	(1.05)	(2.55)	(3.81)	(3.41)	(3.03)	(2.82)	(2.72)
Gross external financing needs/CAR & FXR	99.57	100.11	100.11	93.69	102.78	112.35	111.50	107.08	107.80	109.38
Narrow net external debt/CAR	50.49	49.63	44.97	51.62	48.47	46.83	50.07	51.29	54.02	54.47
GG balance/GDP	(5.28)	(4.89)	(5.54)	(7.96)	(4.59)	(1.99)	(3.40)	(3.40)	(3.50)	(3.50)
GG net debt/GDP	45.44	51.18	56.31	64.23	65.43	61.90	60.33	59.90	60.00	60.10
CPI inflation	1.63	2.22	2.10	0.72	1.73	8.27	6.50	3.90	3.00	3.00
Bank credit to resident private sector/GDP	68.07	68.22	65.41	73.51	73.60	70.24	69.88	69.82	69.91	70.04
e--Estimate. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

Curacao (BBB-/ Stable /A-3)

• Analyst: julia.smith@spglobal.com
• Latest publication: Curacao Sovereign Ratings Affirmed At 'BBB-/A-3'; Outlook Remains Stable, Feb. 22, 2023

Ratings 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 negotiations between Curacao and the Netherlands on the execution of policy reform measures and a revised debt structure will advance smoothly, limiting the risk of potential political strain. At the same time, we expect the recovery will continue but decelerate, 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 a failure to reach an agreement 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, including debt forgiveness, and we believed that this improvement would not be subject to substantial execution risks associated with potential conditions attached to any revised agreement reached. We could also raise the ratings if long-term economic growth materially recovered and was in line with that of other sovereigns with a similar income per capita.

Table 15

Curacao
(%)	2017	2018	2019	2020	2021	2022	2023e	2024e	2025e	2026e
GDP per capita (000)	18.77	18.88	18.88	15.98	17.57	20.09	21.81	23.23	24.27	25.36
GDP growth	(1.73)	(2.17)	(3.37)	(18.44)	4.23	6.50	2.50	2.00	1.00	1.00
GDP per capita growth	(2.56)	(1.97)	(2.55)	(17.17)	5.96	8.34	3.97	3.47	2.45	2.45
Current account balance/GDP	(22.59)	(26.91)	(18.05)	(27.59)	(22.09)	(25.31)	(23.91)	(22.91)	(22.91)	(22.91)
Gross external financing needs/CAR & FXR	122.02	133.42	137.26	140.49	122.81	132.26	114.22	116.92	121.55	124.80
Narrow net external debt/CAR	(33.98)	(14.56)	(25.28)	(5.17)	(89.36)	(58.15)	(41.82)	(33.66)	(27.85)	(23.48)
GG balance/GDP	1.12	(7.98)	0.75	(17.10)	(2.78)	(14.75)	(4.98)	(4.97)	(4.92)	(4.87)
GG net debt/GDP	(35.37)	(24.81)	(33.04)	(41.01)	(40.04)	(30.02)	(27.08)	(24.81)	(23.20)	(21.74)
CPI inflation	1.62	2.55	2.64	2.20	3.80	7.40	4.50	3.00	2.00	2.00
Bank credit to resident private sector/GDP	89.90	91.11	95.04	114.41	98.79	89.89	89.55	89.32	89.18	89.05
e--Estimate. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

Dominican Republic (BB/Stable/B)

• Analyst: patricio.vimberg@spglobal.com
• Latest publication: Dominican Republic Long-Term Ratings Raised To 'BB' From 'BB-' On Stronger Institutions; Outlook Stable, Dec. 19, 2022

Ratings 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 GDP growth and policy continuity over the next 12-18 months that will likely stabilize the government's debt burden.

Downside scenario.  We could lower the ratings over the next 12-18 months if economic growth loses momentum, 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 structurally higher fiscal deficits and debt.

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

Table 16

Dominican Republic
(%)	2017	2018	2019	2020	2021	2022	2023e	2024e	2025e	2026e
GDP per capita (000)	7.87	8.33	8.59	7.55	8.95	10.59	11.12	11.78	12.28	12.80
GDP growth	4.67	6.98	5.05	(6.72)	12.27	4.86	3.50	5.50	5.00	5.00
GDP per capita growth	3.70	5.97	4.12	(7.53)	11.34	4.01	2.64	4.67	4.20	4.27
Current account balance/GDP	(0.17)	(1.54)	(1.34)	(1.70)	(2.85)	(5.62)	(3.96)	(3.72)	(3.47)	(3.30)
Gross external financing needs/CAR & FXR	88.19	90.75	89.63	89.28	87.54	93.44	89.75	90.46	93.12	96.28
Narrow net external debt/CAR	83.50	78.37	84.91	113.83	84.46	74.09	73.61	73.93	74.46	74.61
GG balance/GDP	(4.21)	(3.58)	(3.42)	(9.34)	(3.52)	(3.78)	(3.69)	(3.47)	(3.23)	(2.97)
GG net debt/GDP	45.34	46.08	49.40	65.70	57.36	54.26	54.30	54.12	53.94	53.50
CPI inflation	3.28	3.56	1.81	3.78	8.24	8.81	4.50	4.00	4.00	4.00
Bank credit to resident private sector/GDP	27.95	27.69	28.26	30.23	27.75	28.00	28.25	28.50	28.75	29.00
e--Estimate. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

Ecuador (B-/Stable/B)

• Analyst: carolina.caballero@spglobal.com
• Latest publication: Ecuador 'B-' Ratings Affirmed On Debt-For-Nature Transaction; Outlook Remains Stable, May 12, 2023

Ratings 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: Stable

The stable outlook balances Ecuador's improved fiscal profile, after having met the benchmarks under the IMF's Extended Fund Facility program that ended December 2022, with policy execution risks amid increased political uncertainty following the presidential impeachment process initiated in March 2023.

Downside scenario.  We could lower the ratings over the next 12 months if policy reversals occur that elevate fiscal and external imbalances beyond our expectations or hamper access to official lending. Because access to international markets is still uncertain, larger fiscal deficits may increase reliance on short-term debt, potentially reversing some recent improvement in Ecuador's debt profile, and increase liquidity pressures.

Upside scenario.  We could upgrade Ecuador in the next 12-18 months if more clarity on political dynamics creates space for execution of fiscal and other policies that translate into a faster-than-expected pace of fiscal adjustment while the country maintains current account surpluses. The combination of stronger fiscal and external flows should help Ecuador improve its external debtor position and regain market access in time. We could also raise the ratings if real GDP growth dynamics become more comparable to peers' with similar levels of economic development.

Table 17

Ecuador
(%)	2017	2018	2019	2020	2021	2022	2023e	2024e	2025e	2026e
GDP per capita (000)	6.22	6.32	6.26	5.67	5.98	6.40	6.59	6.82	6.98	7.13
GDP growth	2.37	1.29	0.01	(7.79)	4.24	2.95	2.00	2.70	2.50	2.20
GDP per capita growth	0.85	(0.18)	(1.40)	(9.07)	2.82	1.58	0.69	1.48	1.38	1.09
Current account balance/GDP	(0.18)	(1.22)	(0.14)	2.89	3.18	2.36	1.07	1.38	1.79	1.56
Gross external financing needs/CAR & FXR	143.80	149.36	142.21	149.05	114.26	109.38	115.48	113.77	109.92	111.64
Narrow net external debt/CAR	127.09	125.18	136.22	157.29	120.22	98.59	107.57	109.49	111.36	132.93
GG balance/GDP	(6.34)	(3.70)	(4.01)	(7.21)	(2.59)	0.37	(2.30)	(2.00)	(2.70)	(2.00)
GG net debt/GDP	44.56	44.27	50.14	60.32	59.25	55.56	55.55	55.03	55.85	56.11
CPI inflation	(0.20)	0.27	(0.07)	(0.93)	1.94	3.74	2.30	2.00	1.00	1.00
Bank credit to resident private sector/GDP	32.27	35.97	39.91	44.68	47.94	50.81	48.70	46.49	44.90	44.25
e--Estimate. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

El Salvador (CCC+/Stable/C)

• Analyst: patricio.vimberg@spglobal.com
• Latest publication: El Salvador Upgraded To 'CCC+/C' On Cured Distressed Debt Exchange; Outlook Stable, May 10, 2023

Ratings 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 reflects our view of balanced risks between El Salvador's limited financing alternatives and decreasing financing needs, following better-than-expected fiscal results, recent pension debt exchange, and two Eurobond partial repurchases in the last year. We believe the government could tap alternative sources of liquidity to meet its debt service payments over the next 12 months.

Downside scenario.  We could lower the ratings over the next six to 18 months if we perceived a weakening of the government's ability to secure adequate funding for its fiscal deficits and rollover needs or of its capacity to undertake fiscal adjustment needed to stabilize its very high debt burden. We would look at any further debt exchanges on a case-by-case basis, considering the prevailing macroeconomic context, to determine whether we would consider these to be distressed and tantamount to default. In general, at the current ratings level, we tend to consider debt exchanges as distressed. Furthermore, higher refinancing risks or potential signs of the government being less willing to service its long-term debt would also lead to a downgrade.

Upside scenario.  We would raise the ratings over the next six to 18 months if comprehensive policies led to a combination of improved debt management, continued economic recovery, and greater clarity about fiscal policies, in turn reducing the medium-term financing gap and bolstering the country's payment culture.

Table 18

El Salvador
(%)	2017	2018	2019	2020	2021	2022	2023e	2024e	2025e	2026e
GDP per capita (000)	3.91	4.05	4.17	3.84	4.52	4.96	5.20	5.38	5.52	5.67
GDP growth	2.25	2.41	2.44	(7.84)	11.18	2.60	2.00	2.20	2.40	2.40
GDP per capita growth	1.74	1.89	1.92	(8.30)	10.62	2.09	1.49	1.69	1.89	1.89
Current account balance/GDP	(1.86)	(3.30)	(0.42)	1.62	(4.32)	(6.61)	(4.54)	(3.80)	(3.25)	(3.14)
Gross external financing needs/CAR & FXR	121.33	127.58	121.95	112.19	122.35	124.62	124.50	122.89	123.41	120.53
Narrow net external debt/CAR	89.91	78.88	78.42	93.82	69.85	65.82	67.83	70.95	73.55	75.56
GG balance/GDP	(2.53)	(2.70)	(3.07)	(10.02)	(5.45)	(2.65)	(3.70)	(3.45)	(3.07)	(2.99)
GG net debt/GDP	66.13	65.98	67.10	82.97	76.59	72.02	71.98	72.77	73.58	74.34
CPI inflation	1.01	1.09	0.08	(0.37)	3.47	7.19	3.40	1.60	0.80	0.70
Bank credit to resident private sector/GDP	51.37	53.51	55.33	65.31	60.29	61.42	60.84	60.25	59.67	59.09
e--Estimate. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

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

• Analyst: jennifer.love@spglobal.com
• Latest publication: Full Analysis: Falkland Islands, March 23, 2023

Ratings 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 our 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 to 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 to 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, lower our assessment of external risk and enhance transparency.

(Originally from research update published May 10, 2021)

Table 19

Falkland Islands
(%)	2017	2018	2019	2020	2021	2022	2023e	2024e	2025e	2026e
GDP per capita (000)	87.60	107.03	101.47	103.29	122.74	120.82	123.64	137.34	151.03	159.12
GDP growth	(20.18)	3.77	12.25	(8.37)	6.69	7.69	2.20	2.00	2.00	2.00
GDP per capita growth	(20.18)	3.77	12.25	(8.40)	8.70	7.69	2.20	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	6.86	9.07	(1.06)	1.60	2.30	0.45	3.93	1.79	(2.40)	(2.41)
GG net debt/GDP	(162.22)	(132.58)	(153.52)	(157.76)	(164.34)	(133.00)	(134.62)	(136.51)	(138.43)	(140.39)
CPI inflation	0.97	3.14	1.50	(1.45)	2.53	6.95	5.80	1.40	1.10	1.70
Bank credit to resident private sector/GDP	0.00	0.00	8.09	8.27	7.79	7.39	7.35	7.32	7.28	7.25
e--Estimate. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

Guatemala (BB/Stable/B)

• Analyst: omar.delatorre@spglobal.com
• Latest publication: Guatemala Long-Term Foreign Currency Rating Raised To 'BB' On Economic Resilience; Outlook Stable, April 11, 2023

Ratings score snapshot

• Institutional assessment: 4
• Economic assessment: 5
• External assessment: 2
• Fiscal assessment – Flexibility and performance: 4
• Fiscal assessment – Debt burden: 4
• Monetary assessment: 4

Outlook: Stable

The stable outlook indicates our expectation that over the next six to 18 months cautious macroeconomic management will prevail--notwithstanding presidential and congressional elections on June 25 and unfavorable global conditions. The stable outlook also balances the country's long-standing economic and political challenges with our expectation of economic policies that should help the outgoing administration to maintain a low fiscal deficit and stable debt dynamics.

Downside scenario.  We could lower the rating over the next six to 18 months if worse-than-expected economic performance or unexpected political tensions undermine Guatemala's long-term GDP growth trajectory.

Upside scenario.  We could raise the ratings over the next six to 18 months if favorable political and policy developments raise investor confidence, leading to higher-than-expected economic growth. That, along with gradual progress in strengthening the country's regulatory and legal framework to reduce uncertainties and strengthen the rule of law, could result in an upgrade.

Table 20

Guatemala
(%)	2017	2018	2019	2020	2021	2022	2023e	2024e	2025e	2026e
GDP per capita (000)	4.45	4.49	4.65	4.60	5.03	5.46	5.78	6.12	6.50	6.91
GDP growth	3.08	3.41	4.00	(1.76)	7.98	4.02	3.30	3.50	3.50	3.50
GDP per capita growth	1.42	1.77	2.39	(3.25)	6.39	2.54	1.86	2.10	2.15	2.17
Current account balance/GDP	1.20	0.89	2.36	5.06	2.20	1.39	1.21	1.12	1.04	0.94
Gross external financing needs/CAR & FXR	88.29	84.51	80.26	69.80	71.98	72.61	73.83	74.55	75.22	75.83
Narrow net external debt/CAR	43.23	35.32	24.41	11.14	3.98	0.51	(29.36)	1.90	1.92	2.08
GG balance/GDP	(1.38)	(1.88)	(2.24)	(4.92)	(1.17)	(1.71)	(1.69)	(1.83)	(1.97)	(2.11)
GG net debt/GDP	17.11	17.36	18.12	21.77	19.92	18.99	19.12	19.59	20.17	20.84
CPI inflation	5.68	2.31	3.41	4.82	3.07	9.24	5.50	4.00	4.00	4.00
Bank credit to resident private sector/GDP	38.07	38.18	37.13	38.97	38.94	40.12	40.09	40.09	40.10	40.11
e--Estimate. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

Honduras (BB-/Negative/B)

• Analyst: omar.delatorre@spglobal.com
• Latest publication: Honduras 'BB-/B' Ratings Affirmed; Outlook Revised To Negative On Expected Fiscal Deterioration, July 21, 2022

Ratings score snapshot

• Institutional assessment: 5
• Economic assessment: 5
• External assessment: 2
• Fiscal assessment – Flexibility and performance: 6
• Fiscal assessment – Debt burden: 4
• Monetary assessment: 4

Outlook: Negative

The negative outlook reflects our view that there is at least a one-in-three chance that we could lower the ratings on Honduras over the next six to 18 months if fiscal slippage worsens the sovereign debt burden beyond our expectations. Additionally, a consistent deterioration in the current account balance could weaken the country's external liquidity position and lead to a downgrade.

Upside scenario.  We could revise the outlook to stable in the next six to 18 months if faster-than-expected economic growth, along with cautious fiscal policy (including the fiscal impact of losses in the energy sector), stabilizes the sovereign's debt burden and anchors economic stability.

Table 21

Honduras
(%)	2017	2018	2019	2020	2021	2022	2023e	2024e	2025e	2026e
GDP per capita (000)	2.59	2.65	2.72	2.53	2.99	3.28	3.53	3.69	3.84	4.00
GDP growth	4.84	3.84	2.65	(8.96)	12.53	4.00	3.00	3.60	3.60	3.60
GDP per capita growth	3.12	2.16	1.02	(10.95)	11.48	2.40	1.42	2.01	2.01	2.01
Current account balance/GDP	(1.25)	(6.62)	(2.62)	2.81	(5.26)	(3.43)	(3.10)	(3.28)	(3.50)	(3.65)
Gross external financing needs/CAR & FXR	89.53	93.18	90.93	79.63	83.85	84.40	85.59	88.45	90.28	91.90
Narrow net external debt/CAR	17.61	20.17	16.47	3.85	1.76	3.51	10.01	15.76	22.59	28.63
GG balance/GDP	(0.42)	0.20	0.09	(4.49)	(3.13)	0.54	(2.94)	(3.47)	(3.85)	(4.00)
GG net debt/GDP	40.94	38.48	38.81	48.68	48.55	46.89	46.43	48.52	50.32	52.18
CPI inflation	3.93	4.35	4.37	3.47	4.48	9.08	6.39	4.23	4.00	4.00
Bank credit to resident private sector/GDP	57.80	62.76	63.89	68.93	65.77	69.40	69.29	70.12	70.97	71.81
e--Estimate. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

Jamaica (B+/Stable/B)

• Analyst: jennifer.love@spglobal.com
• Latest publication: Full Analysis: Jamaica, Oct. 5, 2022

Ratings score snapshot

• Institutional assessment: 4
• Economic assessment: 6
• External assessment: 4
• Fiscal assessment – Flexibility and performance: 2
• Fiscal assessment – Debt burden: 6
• Monetary assessment: 4

Outlook: Stable

The stable outlook reflects our expectation that Jamaica will continue to prioritize conservative macroeconomic policy amid a low growth environment. We assume the low fiscal surpluses will underpin a decline in debt over the next one to two years. Furthermore, we expect tourism will support external balances and growth, despite a weaker global backdrop.

Downside scenario.  We could lower the ratings over the outlook period if fiscal results weaken beyond our expectations or the economy fails to perform as expected, putting pressure on external balances and weakening the country's external position.

Upside scenario.  We could raise the ratings over the next two years if Jamaica experiences economic growth that proves more resilient than expected vis a vis its peers, boosting government revenues, sustaining fiscal surpluses, and shrinking the country's debt and interest burden beyond our expectations.

(Originally from research update published Oct. 4, 2021)

Table 22

Jamaica
(%)	2017	2018	2019	2020	2021	2022	2023e	2024e	2025e	2026e
GDP per capita (000)	5.43	5.76	5.79	5.05	5.35	6.23	6.75	6.96	7.18	7.42
GDP growth	1.00	1.90	0.89	(9.91)	4.60	3.89	2.20	1.55	1.30	1.30
GDP per capita growth	0.85	1.71	0.78	(10.02)	4.48	3.75	2.06	1.43	1.17	1.17
Current account balance/GDP	(2.68)	(1.49)	(1.91)	(1.14)	1.02	(0.76)	(0.66)	(0.44)	(0.54)	(0.56)
Gross external financing needs/CAR & FXR	99.70	99.80	101.09	100.51	99.94	92.62	97.29	97.06	96.05	94.65
Narrow net external debt/CAR	100.25	88.30	76.46	108.32	74.82	57.67	57.45	55.21	51.87	47.21
GG balance/GDP	0.67	1.40	1.11	(2.87)	1.15	0.42	0.44	0.63	0.72	0.92
GG net debt/GDP	89.76	78.53	70.85	88.02	78.72	63.07	60.50	57.48	54.63	51.68
CPI inflation	4.39	3.66	3.95	5.23	5.87	10.35	6.40	5.00	5.00	5.00
Bank credit to resident private sector/GDP	42.18	44.01	48.73	57.08	55.13	51.53	52.98	55.49	58.27	61.03
e--Estimate. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

Mexico (BBB/Stable/A-2)

• Analyst: lisa.schineller@spglobal.com
• Latest publication: Full Analysis: Mexico, March 21, 2023

Ratings score snapshot

• Institutional assessment: 3
• Economic assessment: 5
• External assessment: 2
• Fiscal assessment – Flexibility and performance: 3
• 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 the complex global backdrop. We expect the López Obrador administration will pursue economic policies that result in stable fiscal and debt dynamics. Despite changes at the board of Mexico's central bank (Banxico), we expect continued proactive policy decisions in accord with its mandate, a key ratings strength. In the near term, however, we do not expect policy actions will substantially strengthen Mexico's business climate and lead to higher economic growth prospects.

Downside scenario.  We could lower the ratings in the next two years if Mexico experiences unexpected setbacks in macroeconomic management or in discussions with the U.S. and Canada on strengthening cooperation, supply-chain resilience, and cross-border linkages, which would likely weaken investor sentiment and investment. Higher general government debt and deficits would heighten fiscal risks associated with any needed extraordinary support for state-owned companies PEMEX and CFE and could also lead us to lower our ratings.

Upside scenario.  We could raise our ratings on Mexico if we believe it displays effective political and economic management that bolsters its subpar growth trajectory, such as a more dynamic investment outlook. Similarly, initiatives that strengthen budgetary flexibility, 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.

(Originally from research update published July 6, 2022)

Table 23

Mexico
(%)	2017	2018	2019	2020	2021	2022	2023e	2024e	2025e	2026e
GDP per capita (000)	9.28	9.68	9.94	8.44	9.75	10.74	12.24	12.48	12.73	12.92
GDP growth	2.11	2.19	(0.20)	(7.99)	4.72	3.06	1.32	1.70	2.13	2.13
GDP per capita growth	0.94	1.05	(1.28)	(8.95)	3.66	2.05	0.35	0.76	1.22	1.24
Current account balance/GDP	(1.76)	(2.04)	(0.24)	2.09	(0.65)	(0.93)	(0.89)	(0.49)	(0.70)	(1.12)
Gross external financing needs/CAR & FXR	85.40	86.46	84.60	78.84	84.43	84.89	86.91	85.39	85.36	86.77
Narrow net external debt/CAR	43.49	39.89	39.67	38.07	27.41	22.74	22.95	23.30	23.88	24.28
GG balance/GDP	(0.79)	(1.83)	(1.80)	(2.32)	(3.04)	(3.35)	(3.32)	(3.10)	(2.92)	(2.80)
GG net debt/GDP	41.25	41.23	41.49	46.72	46.74	46.55	47.12	47.24	48.41	49.72
CPI inflation	6.04	4.90	3.64	3.40	5.69	7.90	6.38	4.08	3.22	2.97
Bank credit to resident private sector/GDP	32.75	32.12	33.66	33.77	31.99	32.11	32.13	32.28	32.38	32.47
e--Estimate. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

Montserrat (BBB-/Stable/A-3)

• Analyst: alexis.smith-juvelis@spglobal.com
• Latest publication: Full Analysis: Montserrat, April 27, 2023

Ratings 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 of continued budgetary and institutional support for Montserrat from the U.K. over the next two years. We expect economic recovery in Montserrat to be driven mainly by the public sector and key construction projects, while tourism is expected to recover more gradually. We believe the U.K.'s support for Montserrat will remain 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 us to raise the ratings 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 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.

(Originally from research update published April 13, 2021)

Table 24

Montserrat
(%)	2017	2018	2019	2020	2021	2022	2023e	2024e	2025e	2026e
GDP per capita (000)	12.52	13.48	14.53	14.45	16.25	15.48	16.14	16.67	17.21	17.77
GDP growth	(1.55)	7.58	6.41	(1.13)	5.48	(1.18)	2.98	2.00	2.00	2.00
GDP per capita growth	(2.09)	9.90	9.90	(3.42)	12.43	(4.27)	2.98	2.00	2.00	2.00
Current account balance/GDP	(10.34)	(3.03)	1.57	8.34	(18.18)	(9.79)	(17.93)	(17.95)	(15.57)	(15.08)
Gross external financing needs/CAR & FXR	126.66	123.51	119.02	115.18	147.32	128.29	149.19	152.42	150.09	151.56
Narrow net external debt/CAR	(166.31)	(173.08)	(171.79)	(215.72)	(192.40)	(145.35)	(163.92)	(163.70)	(159.52)	(159.89)
GG balance/GDP	1.08	(6.58)	(13.07)	(4.98)	1.51	2.69	0.00	0.00	0.00	0.00
GG net debt/GDP	(17.79)	(14.41)	(7.52)	(5.76)	(4.32)	(3.84)	(2.16)	(0.52)	1.12	0.70
CPI inflation	1.19	1.31	(1.07)	(1.89)	2.61	3.06	1.26	1.26	1.26	1.26
Bank credit to resident private sector/GDP	51.89	51.92	48.92	48.32	46.48	42.46	40.74	39.45	38.21	37.00
e--Estimate. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

Nicaragua (B/Stable/B)

• Analyst: patricio.vimberg@spglobal.com
• Latest publication: Nicaragua Long-Term Ratings Raised To 'B' On Economic And Fiscal Recovery; Outlook Is Stable, Oct. 25, 2022

Ratings 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 recovery coupled with fiscal and monetary policies that sustain economic stability amid a complex international scenario of higher inflation and rising interest rates.

Downside scenario.  We could lower the ratings in the next six to 18 months if Nicaragua's current economic recovery were to be undermined by weaker domestic and external demand, or further potential negative 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 sustainable basis could lead to an upgrade.

Table 25

Nicaragua
(%)	2017	2018	2019	2020	2021	2022	2023e	2024e	2025e	2026e
GDP per capita (000)	2.16	2.02	1.95	1.92	2.12	2.33	2.48	2.61	2.76	2.91
GDP growth	4.63	(3.36)	(2.90)	(1.77)	10.35	3.75	3.00	3.50	3.50	3.50
GDP per capita growth	3.55	(4.36)	(3.90)	(2.78)	9.21	2.68	1.94	2.43	2.43	2.43
Current account balance/GDP	(7.17)	(1.81)	5.93	3.59	(3.11)	(1.39)	(2.13)	(1.91)	(1.71)	(1.53)
Gross external financing needs/CAR & FXR	113.61	100.56	96.36	92.67	97.18	92.92	90.44	90.23	90.46	90.78
Narrow net external debt/CAR	109.87	121.14	111.80	116.35	93.24	72.25	69.66	66.37	63.25	64.36
GG balance/GDP	(1.26)	(3.02)	(0.32)	(1.78)	(1.20)	0.97	(0.99)	(1.73)	(1.73)	(1.73)
GG net debt/GDP	37.38	45.38	48.64	52.14	52.08	45.68	43.35	42.50	41.70	40.94
CPI inflation	3.85	4.95	5.38	3.68	4.93	10.47	6.00	4.00	4.00	4.00
Bank credit to resident private sector/GDP	39.25	36.09	30.00	27.99	25.78	26.20	26.92	27.67	28.44	26.71
e--Estimate. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

Panama (BBB/Negative/A-2)

• Analyst: alexis.smith-juvelis@spglobal.com
• Latest publication: Panama 'BBB/A-2' Ratings Affirmed; Outlook Remains Negative, Aug. 10, 2022

Ratings score snapshot

• Institutional assessment: 3
• Economic assessment: 3
• External assessment: 4
• Fiscal assessment – Flexibility and performance: 3
• Fiscal assessment – Debt burden: 4
• Monetary assessment: 5

Outlook: Negative

The negative outlook reflects our view of downside risks to Panama's fiscal and economic metrics in the next six to 12 months.

Downside scenario.  We could lower the rating if we were to see a worsening of public finances as a result of a narrow tax base, spending rigidities, and the social security system's declining financial reserves. The degree to which policy choices weaken support for sustainable public finances can also weigh on the rating. We could also lower the rating in the event of potential unexpected slackening of Panama's historically strong GDP growth rate or an enlargement of its external financing requirements that worsens its external profile.

Upside scenario.  Alternatively, we could revise the outlook to stable during the same period if public finances stabilize due to effective economic management that limits the annual increase in the government's debt burden and sustains favorable economic growth and macroeconomic stability.

Table 26

Panama
(%)	2017	2018	2019	2020	2021	2022	2023e	2024e	2025e	2026e
GDP per capita (000)	15.18	16.18	16.53	12.62	14.66	17.41	18.49	19.46	20.39	17.74
GDP growth	5.59	66.93	3.28	(49.18)	15.34	6.00	4.50	4.50	4.50	4.50
GDP per capita growth	4.02	64.50	1.81	(49.89)	13.77	4.60	3.15	3.19	3.22	(14.28)
Current account balance/GDP	(5.94)	(7.96)	(4.64)	(0.35)	(2.22)	(3.54)	(4.40)	(5.43)	(5.91)	(6.45)
Gross external financing needs/CAR & FXR	178.03	177.34	174.41	191.12	150.91	157.02	161.47	161.72	160.03	158.60
Narrow net external debt/CAR	71.14	78.11	90.32	104.34	99.75	106.83	96.39	88.84	83.27	77.70
GG balance/GDP	(1.86)	(2.70)	(2.90)	(10.13)	(6.84)	(3.91)	(3.12)	(2.82)	(2.52)	(2.20)
GG net debt/GDP	23.73	25.17	29.41	49.23	47.04	43.09	43.20	43.39	43.49	42.35
CPI inflation	0.87	0.77	(0.29)	(1.62)	1.65	2.86	1.11	0.00	0.00	0.00
Bank credit to resident private sector/GDP	84.24	81.50	80.32	101.63	87.62	76.45	76.45	76.45	76.45	76.45
e--Estimate. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

Paraguay (BB/Stable/B)

• Analyst: carolina.caballero@spglobal.com
• Latest publication: Full Analysis: Paraguay, March 29, 2023

Ratings score snapshot

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

Outlook: Stable

The stable outlook indicates our view that Paraguay will maintain cautious macroeconomic management in the next 12-18 months, notwithstanding presidential and congressional elections on April 30. Strong economic recovery should help the outgoing administration to continue reducing the fiscal deficit and maintain stable debt dynamics, despite spending pressures. As general government deficits decline, financing needs are likely to remain contained amid more challenging market conditions. At the same time, stronger exports and still-supportive commodity prices should narrow the current account deficit and limit pressure on the external profile.

Downside scenario.  We could lower the rating over the next six to 18 months if worse-than-expected economic performance or an unexpectedly poor policy response undermines Paraguay's long-term GDP growth trajectory and significantly worsens its fiscal and external profiles. Large and persistent fiscal deficits financed by external debt could increase the country's net external debt burden and raise its vulnerability to external shocks, leading to a downgrade.

Upside scenario.  We could raise the rating over the next 12-18 months if effective political and economic management (such as a broader tax base and steps to address the deficit in the pension system) results in strengthened fiscal flexibility that facilitates fiscal correction while tackling Paraguay's long-standing infrastructure needs. At the same time, a sustained reduction in the financial system's dollarization could improve monetary flexibility, leading to an upgrade.

(Originally from research update published May 18, 2022)

Table 27

Paraguay
(%)	2017	2018	2019	2020	2021	2022	2023e	2024e	2025e	2026e
GDP per capita (000)	5.61	5.70	5.30	4.89	5.43	5.60	5.83	6.18	6.43	6.67
GDP growth	4.81	3.20	(0.40)	(0.82)	4.02	0.08	5.00	3.30	3.50	3.00
GDP per capita growth	3.32	1.75	(1.79)	(2.19)	2.60	(1.28)	3.55	1.87	2.07	1.58
Current account balance/GDP	3.41	(0.24)	(0.58)	1.95	(0.76)	(6.50)	0.51	(0.06)	0.17	1.50
Gross external financing needs/CAR & FXR	75.83	79.81	81.19	75.38	74.31	85.37	78.24	77.08	76.14	75.05
Narrow net external debt/CAR	(2.25)	5.25	11.89	17.21	25.83	40.43	32.23	28.61	24.70	12.75
GG balance/GDP	(0.44)	(1.00)	(2.38)	(5.72)	(3.39)	(2.65)	(2.90)	(2.30)	(2.00)	(1.80)
GG net debt/GDP	5.81	7.90	11.27	19.20	20.37	24.28	24.61	25.63	26.35	26.95
CPI inflation	4.51	3.20	2.81	2.17	6.83	8.12	5.00	4.50	4.00	4.00
Bank credit to resident private sector/GDP	40.65	44.08	47.13	50.44	49.40	50.96	51.00	51.05	51.10	51.15
e--Estimate. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

Peru (BBB/Negative/A-2)

• Analyst: constanza.perez.aquino@spglobal.com
• Latest publication: Peru Outlook Revised To Negative On Heightened Political Risk; 'BBB/A-2' Foreign Currency Ratings Affirmed, Dec. 12, 2022

Ratings 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: Negative

The negative outlook reflects the risk to the sovereign's creditworthiness from the enduring political standstill and challenging relationship between the country's executive and legislative branches of government. Former President Pedro Castillo's recent attempt to dissolve Congress and his subsequent ouster from office are the latest developments of Peru's long-standing political impasse, which threatens to weaken the government's capacity to implement timely policies to support robust private investment and economic growth.

Downside scenario.  We could lower the ratings by one notch if prolonged political impasse or further adverse developments reduce the predictability of policymaking or worsen institutional stability, auguring badly for economic policy outcomes.

Upside scenario.  We could revise the outlook to stable over the next two years if Peru makes progress on reducing the heightened political uncertainty and maintaining continuity in key economic--including fiscal and monetary--policies. A timely reduction of the uncertainties created by recent developments, along with prospects of greater stability in governance and solid economic policies, could sustain the current sovereign credit rating.

Table 28

Peru
(%)	2017	2018	2019	2020	2021	2022	2023e	2024e	2025e	2026e
GDP per capita (000)	6.97	7.18	7.23	6.31	6.82	7.33	7.69	7.78	7.84	7.89
GDP growth	2.52	3.98	2.15	(10.94)	13.95	2.37	1.98	2.76	2.91	3.04
GDP per capita growth	0.69	2.04	0.34	(12.29)	12.53	1.26	0.87	1.65	1.80	1.92
Current account balance/GDP	(0.91)	(1.37)	(0.72)	1.16	(2.34)	(4.35)	(2.95)	(1.88)	(1.33)	(1.28)
Gross external financing needs/CAR & FXR	79.25	73.19	71.92	60.25	67.41	71.24	74.93	74.81	74.73	74.93
Narrow net external debt/CAR	14.99	19.12	10.94	14.66	22.86	29.90	31.22	29.39	27.60	27.56
GG balance/GDP	(2.82)	(1.98)	(1.37)	(8.31)	(2.54)	(1.37)	(1.80)	(1.70)	(1.15)	(1.15)
GG net debt/GDP	9.70	11.50	12.80	21.91	21.62	20.70	22.89	23.75	24.17	24.60
CPI inflation	2.80	1.32	2.14	1.83	3.98	7.88	5.78	3.03	2.29	2.02
Bank credit to resident private sector/GDP	42.10	43.68	44.43	54.66	47.62	46.39	45.18	44.83	44.74	44.72
e--Estimate. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

Suriname (SD/NM/SD)

• Analyst: julia.smith@spglobal.com
• Latest publication: Full Analysis: Suriname, Jan. 5, 2023

Ratings 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

Suriname defaulted on its foreign and local currency debt obligations in 2020 and 2021. Our foreign and local currency ratings on Suriname are 'SD' (selective default). We do not assign outlooks to 'SD' or 'D' (default) ratings because they express a condition and not a forward-looking opinion of default probability. Once the respective restructuring agreements are complete, and we are able to conduct a forward-looking review that takes into account any future debt exchanges, as well as any other interim developments, we will revise the respective sovereign and issue ratings, in accordance with our "S&P Global Ratings Definitions." At that time, we will analyze the sovereign's general credit standing, raising the sovereign credit rating from the 'SD' level.

(Originally from research update published June 3, 2021)

Table 29

Suriname
(%)	2017	2018	2019	2020	2021	2022	2023e	2024e	2025e	2026e
GDP per capita (000)	6.16	6.77	7.12	6.83	5.23	6.14	6.44	7.37	8.16	9.13
GDP growth	1.57	4.95	1.17	(15.98)	(3.50)	1.80	2.20	2.70	3.00	3.00
GDP per capita growth	0.24	3.76	(0.17)	(17.48)	(4.69)	0.79	1.19	1.68	1.98	3.00
Current account balance/GDP	1.93	(2.97)	(10.54)	6.25	5.46	1.84	(6.27)	(3.32)	(0.65)	0.55
Gross external financing needs/CAR & FXR	96.64	107.29	112.35	97.14	99.62	95.49	103.55	131.22	129.83	129.83
Narrow net external debt/CAR	60.75	58.30	78.77	69.51	61.35	48.74	110.96	119.42	125.49	133.40
GG balance/GDP	(8.33)	(9.92)	(18.46)	(11.10)	1.51	(9.00)	(12.01)	(10.86)	(10.92)	(10.83)
GG net debt/GDP	64.05	57.48	66.77	113.89	105.30	90.61	77.38	77.80	80.51	82.83
CPI inflation	9.30	5.44	4.22	60.74	60.69	60.70	35.00	14.10	10.00	10.00
Bank credit to resident private sector/GDP	30.51	27.33	26.04	28.07	21.91	21.89	22.02	22.25	22.49	22.73
e--Estimate. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

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

• Analyst: jennifer.love@spglobal.com
• Latest publication: Trinidad and Tobago Outlook Revised To Stable From Negative, 'BBB-/A-3' Rating Affirmed On Stronger Economy, July 21, 2022

Ratings 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 our view that Trinidad and Tobago will benefit from significantly higher energy and petrochemical prices, which will more than offset lower-than-expected energy production. We believe that higher prices will spur improved incomes and stronger government revenue collection than previously anticipated, helping to stem the rise in government debt.

Downside scenario.  We could lower the ratings 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 ratings over the next 24 months if stronger economic performance and favorable long-term GDP growth prospects lead to a sustained decline in government debt and ease external pressures.

Table 30

Trinidad and Tobago
(%)	2017	2018	2019	2020	2021	2022	2023e	2024e	2025e	2026e
GDP per capita (000)	17.19	17.50	17.10	15.05	17.89	21.56	22.75	23.72	24.53	25.36
GDP growth	(4.71)	(0.87)	0.11	(7.68)	(1.03)	2.11	2.50	1.70	1.70	1.70
GDP per capita growth	(5.15)	(1.28)	(0.26)	(7.98)	1.30	2.21	2.19	1.40	1.40	1.40
Current account balance/GDP	5.92	6.69	4.28	(6.44)	11.02	18.28	10.04	1.77	1.64	1.71
Gross external financing needs/CAR & FXR	57.31	60.24	67.94	82.46	59.22	59.69	64.10	70.63	72.76	74.73
Narrow net external debt/CAR	(66.04)	(55.61)	(56.90)	(89.65)	(57.17)	(33.41)	(34.03)	(41.84)	(39.74)	(38.09)
GG balance/GDP	(8.39)	(3.46)	(2.50)	(11.74)	(7.47)	0.54	(1.70)	(2.47)	(3.90)	(5.34)
GG net debt/GDP	7.89	6.50	9.55	25.20	25.21	26.19	25.63	26.08	28.13	31.55
CPI inflation	1.88	1.02	1.00	0.60	2.06	5.80	3.00	2.90	2.00	2.00
Bank credit to resident private sector/GDP	44.67	45.80	49.70	55.40	47.98	42.23	41.89	41.62	41.41	41.20
e--Estimate. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

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

• Analyst: alexis.smith-juvelis@spglobal.com
• Latest publication: Full Analysis: Turks and Caicos Islands, March 29, 2023

Ratings score snapshot

• Institutional assessment: 2
• Economic assessment: 4
• External assessment: 4
• Fiscal assessment – Flexibility and performance: 1
• Fiscal assessment – Debt burden: 1
• Monetary assessment: 6

Outlook: Stable

The stable outlook reflects our expectation that the economy will continue to recover given the strong performance of tourism, and will improve in 2023. Furthermore, we believe the territory will continue to adhere to prudent financial management and limit borrowing, and that fiscal reserve balances will increase in the next two years. We also expect continuity in the Turks and Caicos Islands' (TCI's) institutional relationship with the U.K.

Downside scenario.  We could lower our ratings in the next two years if the rebound in tourism is interrupted or turns out to be weaker than we expect, leading to prolonged stress on revenues that causes the government to run persistent fiscal deficits that materially worsen public finances. Similarly, an unexpected worsening 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 better-than-expected GDP increases and continued favorable growth prospects were to substantially boost economic resilience. We could also raise the ratings if better availability of timely data, especially on external flows and stocks, boosted transparency and indicated that TCI enjoyed a significantly stronger economic or external position.

(Originally from research update published May 26, 2021)

Table 31

Turks and Caicos Islands
(%)	2017	2018	2019	2020	2021	2022	2023e	2024e	2025e	2026e
GDP per capita (000)	25.70	26.91	27.88	20.76	23.67	26.95	28.77	30.61	32.45	34.40
GDP growth	(2.49)	5.61	5.30	(26.76)	13.60	9.00	5.00	5.30	5.30	5.50
GDP per capita growth	(7.09)	1.57	1.41	(29.38)	9.69	7.92	2.44	3.74	3.74	3.94
Current account balance/GDP	5.21	20.11	28.70	(5.51)	21.86	31.47	32.00	32.42	32.79	33.14
Gross external financing needs/CAR & FXR	155.81	111.99	110.83	186.51	113.41	94.83	89.42	87.54	85.86	84.28
Narrow net external debt/CAR	(43.42)	(57.99)	(29.58)	(108.78)	(74.15)	(64.31)	(61.27)	(58.97)	(56.87)	(54.77)
GG balance/GDP	8.57	7.94	5.59	(6.67)	8.52	2.34	4.45	4.83	4.51	3.76
GG net debt/GDP	(33.65)	(39.56)	(42.88)	(48.50)	(49.54)	(44.95)	(45.11)	(46.21)	(47.09)	(47.18)
CPI inflation	2.10	2.10	2.20	2.30	4.50	6.00	4.40	2.70	2.30	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. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

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

• Analyst: joydeep.mukherji@spglobal.com
• Latest publication: U.S. 'AA+/A-1+' Sovereign Ratings Affirmed; Outlook Remains Stable, March 16, 2023

Ratings score snapshot

• Institutional assessment: 1
• 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. Such strengths are offset by comparatively weak public finances, with general government deficits around 5% of GDP annually, contributing to a net debt burden rising slowly toward 100% of GDP in the next couple of years.

The stable outlook also assumes that Congress will either raise or suspend the debt ceiling to ensure that the Treasury can remain timely on its debt service obligations. The U.S. government reached its statutory debt limit in January 2023. Since then, the Treasury has been undertaking extraordinary measures to remain below this limit while meeting its obligations. We expect Congress will engage in brinkmanship, but ultimately pass debt ceiling legislation, as it has on over 80 prior instances--understanding the severe consequences on financial markets and the economy of not doing so.

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.

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 reverses the recent deterioration in public finances by lowering 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

United States
(%)	2017	2018	2019	2020	2021	2022	2023e	2024e	2025e	2026e
GDP per capita (000)	59.76	62.69	64.96	63.49	70.09	76.18	79.23	81.52	84.07	86.67
GDP growth	2.24	2.95	2.29	(2.77)	5.95	2.06	0.85	1.20	1.76	1.97
GDP per capita growth	1.66	2.44	1.80	(3.52)	5.64	1.58	0.41	0.69	1.23	1.45
Current account balance/GDP	(1.85)	(2.14)	(2.09)	(2.94)	(3.63)	(3.71)	(2.84)	(2.50)	(2.43)	(2.37)
Gross external financing needs/CAR & FXR	331.54	314.25	312.95	369.63	366.28	323.67	326.37	333.26	339.01	340.15
Narrow net external debt/CAR	328.49	313.23	338.08	429.81	390.79	332.14	348.25	360.21	367.83	373.22
GG balance/GDP	(3.46)	(5.45)	(6.26)	(15.85)	(10.92)	(4.60)	(4.81)	(5.48)	(5.67)	(5.86)
GG net debt/GDP	80.52	80.91	82.07	97.40	99.39	95.50	95.94	98.03	100.00	102.12
CPI inflation	2.13	2.44	1.81	1.23	4.70	8.00	4.19	2.42	1.58	1.46
Bank credit to resident private sector/GDP	152.53	151.70	151.54	163.89	157.04	152.51	152.29	153.60	157.51	161.57
e--Estimate. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

Uruguay (BBB+/Stable/A-2)

Analyst: constanza.perez.aquino@spglobal.com

Latest publication: Uruguay Long-Term Ratings Raised To 'BBB+' On Stronger Fiscal Policy; Outlook Stable, April 26, 2023

Ratings 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 for continued solid fiscal execution under an enhanced fiscal policy framework and for moderate economic growth that will limit increases in debt in 2023-2026. We expect investments in diverse sectors of the economy to support GDP growth of about 2.5% on average in 2024-2026.

Downside scenario.  We could lower the ratings over the next two years if fiscal execution unexpectedly slips, weakening the government's 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 lowering inflation from the 7% average of the past two decades and a sustained decline in inflation expectations, which could result in 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.

Table 33

Uruguay
(%)	2017	2018	2019	2020	2021	2022	2023e	2024e	2025e	2026e
GDP per capita (000)	18.81	18.84	17.92	15.45	17.60	20.32	22.01	22.68	22.92	23.22
GDP growth	1.74	0.16	0.74	(6.26)	5.28	4.92	1.00	3.00	2.20	2.20
GDP per capita growth	1.37	0.01	0.74	(6.59)	4.84	4.49	0.60	2.60	1.82	1.82
Current account balance/GDP	0.01	(0.47)	1.21	(0.83)	(2.51)	(3.19)	(2.76)	(1.19)	(0.51)	0.42
Gross external financing needs/CAR & FXR	101.10	90.65	86.65	99.10	98.55	100.91	105.87	103.89	102.19	98.29
Narrow net external debt/CAR	26.34	27.79	31.48	26.72	21.33	29.92	36.80	37.84	34.99	29.17
GG balance/GDP	(2.68)	(3.42)	(4.19)	(5.19)	(4.19)	(3.14)	(3.00)	(2.76)	(2.84)	(2.80)
GG net debt/GDP	38.44	41.46	45.15	52.94	50.90	47.89	49.90	51.35	53.29	55.02
CPI inflation	6.55	7.96	8.79	9.41	7.96	8.30	7.40	6.50	6.20	6.20
Bank credit to resident private sector/GDP	24.76	25.72	26.08	28.15	26.67	26.67	26.79	26.62	26.73	26.85
e--Estimate. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

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