Credit rating agency Fitch downgraded Ecuador’s rating from B- to CCC+, the economy ministry said, citing political uncertainty surrounding Ecuador in the midst of an election process.

“Both Fitch and Standard & Poor’s reveal that the current political uncertainty is creating an unfavorable international perception of the country in the financial markets, mainly in relation to the economic management of the future government”, and because of the oil extraction operations in the ITT field, this because the election is included in the consultation to leave or not underground that crude oil. “In addition, the agencies are considering the possible effects of the El Niño phenomenon on the economy,” said the state portfolio managed by Minister Pablo Arosemena.

Country risk in Ecuador is falling from its peak of 2,000 points a week before the election

Ficth was already downgraded last May after President Guillermo Lasso’s death crucifixion, which included the dissolution of the National Assembly and early elections for the president and members of the assembly. The international firm then revised Ecuador’s outlook from stable to negative: B-. “Continued governance challenges and weakening political stability will continue to hamper the sovereign’s chances of regaining market access and could weaken its macroeconomic and fiscal trajectory, relative to its B-rated peers,” it said in a statement obtained by Bloomberg Line. In the case of Standard & Poor’s, Ecuador’s credit rating is B-.

The ministry states that these two credit rating agencies have highlighted in their recent reports important economic achievements achieved by the government of Guillermo Lass: the reduction of the fiscal deficit, the sustainability of the public debt, the strengthening of dollarization supported by central bank reserves, the control of cash inflation and the current account surplus, among others. . But that “they also highlight the political uncertainty surrounding the country in the context of the next electoral process as a risk to be considered”.

The government announces a debt swap for the preservation of the Galapagos Islands, which would save Ecuador more than 1,100 million dollars

The elections will be held this Sunday, August 20, and the new government should take office in November. Until then, Lasso’s administration guarantees that it will “continue to work in a transparent and responsible manner for the sustainability of public finances that strengthen international trust.”