Moody's changes Colombia outlook to positive

Moody's Investors Service said that it changed the outlook to positive from stable on Colombia's Ba2 foreign-currency government bond rating, Ba1 foreign-currency bond ceiling and Ba3 foreign-currency ceiling for deposits.

The change reflects the improvement of key debt ratios due to the investment-driven recovery in growth and continued fiscal restraint. The outlook for Colombia's Baa3 local-currency government bond rating is unaffected by this action and remains stable.

"Diminished security concerns have spurred a positive 'confidence shock'," Moody's vice president and senior analyst Alessandra Alecci said in a written statement. "Investment is much higher compared to just a few years ago, reflecting a structural change that is expected to underpin stronger long-term economic growth and to sustain improvements in debt dynamics."

Reforms have stabilized pension-related and other mandatory spending, the agency said, and the government has contained the growth of spending so that debt ratios have fallen.

The country continues to see an external current account deficit but long-term non-debt creating capital inflows have increased particularly in the energy sector, Moody's said. External vulnerability indicators have declined along with the public debt's exposure to currency swings.

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