Moody’s Sees Guatemala Deterioration

Moody’s has cut the outlook on Guatemala’s ratings to stable from positive. The affected ratings are the Ba2 foreign currency rating, Ba1 country ceiling for foreign currency bonds and Ba3 country ceilings for foreign currency deposits. The cut reflects a relative worsening of Guatemala’s credit metrics compared to similarly rated countries, as well as the impact of the global crisis, which will make credit improvements more difficult. “Despite recent above-trend growth, Guatemala is growing slower than the median for Ba sovereigns; Guatemala is getting poorer and smaller compared to other Ba countries,” says Moody’s vice president Gabriel Torres. “Ten years ago Guatemala’s per capita GDP was 82% of Ba rated nations. Today that has dropped to 58% because of the lower relative growth,” he adds.