Global ratings agency Fitch downgraded Ecuador’s rating to “CCC+” from “B-“, citing an increase in financing risks stemming from a significant deterioration in fiscal accounts.
“Ecuador’s ability to pay will be put under greater pressure by repaying debt to the International Monetary Fund in 2025.” Fitch said.
The rating agency stressed that it sees the service of the external debt (interest plus amortizations) as manageable in the short term.
“Amid political uncertainty, the country will not be able to obtain financing in the international debt market or through a new program with the IMF,” Fitch said.
Ecuador’s interim general elections are set to take place on August 20 amid widespread unrest in the aftermath of the assassination of presidential candidate Fernando Villavicencio at a campaign event earlier this month.
With rising political risk and obstacles to governability, the rating agency does not expect significant reform progress to address Ecuador’s fiscal and financial challenges in the remaining 18-month presidential term.
