Fitch: Colombia outlook now stable

Fitch Ratings said it revised the outlook on Colombia's sovereign ratings to stable from negative on improved fiscal performance and better GDP growth prospects.

The long-term foreign currency rating remains at BB, and the long-term local currency (Colombian peso) rating at BBB-.

According to sovereign analyst Morgan C. Harting at Fitch Ratings, "Public finances appear to be stabilizing as the economy gathers momentum, higher taxes boost the primary surplus and recent peso appreciation keeps a lid on government debt - about half of which is in foreign currency - relative to GDP."

For the last four years, large deficits and slow economic growth drove general government debt up by 30% of GDP. As with many other countries in the region, competitiveness is benefiting from improved terms of trade and faster global growth is underpinning stronger external demand.

In Colombia's case, local confidence has also risen on the perception of improvements in domestic security, a grave concern in this country struggling with a decades-old guerrilla movement and very high crime rates.

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