S&P Positive on Colombia

S&P has revised the outlook on Colombia’s BBB minus rating to positive from stable, it says. The change reflects the growing possibility that effective implementation of fiscal policy following earlier reforms could improve the sovereign’s financial profile, by reducing its debt and interest burdens, the agency says. “A gradually declining debt burden, combined with continuity in key economic policies in coming years, could sustain GDP growth, strengthen the resilience of the Colombian economy, and reduce its vulnerability to external shocks, leading to a higher rating,” S&P says. The agency could revise its outlook back to stable if the strengthening of the government’s financial profile is reversed by unexpectedly large fiscal deficits and potentially lower long-term growth prospects.