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Country Risk Service El Salvador 4th Quarter

  • ID: 2292817
  • Country Profile
  • Region: El Salvador
  • 26 Pages
  • The Economist Intelligence Unit
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Sovereign risk remains B rated. Reflecting tepid GDP growth and moderate fiscal deficits, the public debt/GDP ratio reached 74.1% in 2017. The presidential election in February 2019 and legislative gridlock will complicate fiscal policy. Medium-term fiscal and liquidity concerns will persist, given reliance on short-term debt stemming from congressional resistance to external debt issuance. This is the main risk factor for the rating.

Currency risk remains BB rated. Despite continued concerns about export competitiveness, there is little risk that dollarisation will come under threat, given its role in underpinning macroeconomic and monetary stability.

The banking sector rating remains BB. Financial soundness indicators are reasonable, but profitability has declined as lending growth has decelerated. Tighter global financing conditions pose some risks to the outlook, as a weak domestic deposit base means that banks partly fund their loans from external sources.
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Country Risk Service El Salvador 4th Quarter

Risk assessment
Sovereign risk
Currency risk
Banking sector risk
Political risk
Economic structure risk

Definitions
Sovereign risk
Currency risk
Banking sector risk
Political risk
Economic structure risk
Overall country risk

Sovereign risk
Current assessment
Positive factors
Negative factors
Rating outlook

Currency risk
Current assessment
Positive factors
Negative factors
Rating outlook
Foreign-exchange regime

Banking sector risk
Current assessment
Positive factors
Negative factors
Rating outlook

Generic risks
Political risk assessment
Economic structure risk assessment

Country risk
Overall country risk

Central scenario for 2019-23: Political stability

Central scenario for 2019-23: Election watch

Central scenario for 2019-23: International relations

Central scenario for 2019-23: Policy trends

Central scenario for 2019-23: Fiscal policy

Central scenario for 2019-23: Monetary policy

Central scenario for 2019-23: Economic growth

Central scenario for 2019-23: Inflation

Central scenario for 2019-23: Exchange rates

Central scenario for 2019-23: External sector

Central scenario for 2019-23: External financing requirement

Central scenario for 2019-23: External debt

Key risk indicators

Ratings summary

Quarterly indicators

International assumptions summary

Economic structure

Public finances

Exchange rates, interest rates and prices

Financial sector

Current account

International liquidity

Foreign payment and liquidity indicators

External trade

External financing requirement

External debt stock

External debt service
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