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Fitch maintains Chile’s risk rating at A-, Treasury focuses on ‘perception’



Finance Minister Mario Marcel said the A- rating given by the country’s rating agency, Fitch Ratings, “recognises the government’s commitment to focus on the soundness of public finances.” Chile remains at the level of countries such as Spain, Latvia and Poland, a step below economies such as Japan and Iceland.

of Risk rating agency Fitch Ratings Approved Thursday Chile’s foreign currency debt rating is A-, Keep your point of view “stable”.

Through its statement, Fitch highlighted the country’s financial position, low debt levels relative to peers, governance indicators, and a record macroeconomic policy.Similarly, he emphasized the score assigned Sustainability (ESG).

“Chile’s ratings are underpinned by a relatively strong sovereign balance sheet, with a public debt-to-GDP ratio well below that of other countries, strong governance indicators and a strong combination of measures to combat inflation and a flexible exchange rate. We have a track record of credible macroeconomic policies centered on rates,” the international organization commented.

“These strengths are offset by per capita income projected to remain low relative to peers, high reliance on raw materials and deteriorating liquidity and external leverage measures,” Fitch added. .

Similarly, Fitch analyzes the progress of government-sponsored reforms (taxes and pensions) in addition to the ongoing constitutional process. He is expected to grow by 2.3% in 2022 and -0.8% next year due to lower private sector consumption and slower investment.

Finally, Fitch gives Chile a high ESG rating, citing “a long history of stable and peaceful political transitions, well-established rights to participate in the political process, strong institutional capacity and an effective rule of law.” , and reflect low corruption”.

Among the factors that may improve the rating in the future, Fitch believes that a credible and consistent fiscal consolidation process, a declining trajectory for public debt, and improved prospects for economic growth will lead to GDP per capita growth. “We can raise the bar,” he said.

On the other hand, large and persistent fiscal deficits leading to rising public debt and depleting state-owned assets may later signal negative credit behavior.

Government-Assessed Fitch Ratings

of Minister of Finance Mario Marcel, He stressed that the rating agency’s decision supports Chile’s macroeconomic policy record.

Likewise, we will recognize our actions on fiscal issues and reaffirm our creditworthiness with a stable perspective during the course of economic recovery in an uncertain international environment.

“Maintaining Chile’s classification is a recognition of this government’s commitment to maintaining fiscal health since we took office,” he stressed.

“Not only have fiscal spending been cut this year, but next year’s budget is a strict adherence to fiscal balance rules, in line with our commitment that debt will not exceed 45% of GDP.

“These fiscal adjustments come in conjunction with the design of public policies that have helped citizens in adverse inflationary situations and recognize our interest in keeping social assistance in the right accounts. This should be a strong signal of confidence in the investment community,” said the finance minister.

By this classification, Chile remains at the level of countries such as Spain, Latvia and Poland, a step below economies such as Japan and Iceland.

Recall that the last agency to review the risk classification was S&P Global, which approved the country’s credit rating with a stable outlook last October.

Source: Biobiochile

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