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Related ���������ֳ� Content: Presentation: A Year After the Pandemic: Mexico, Central America and the Caribbean

���������ֳ�-New York-25 May 2021: ���������ֳ� expects economic recovery in Mexico, Central America and the Caribbean to lag rating peers given the regions’ deep economic contractions and muted recovery prospects, as negative rating pressures continue a year on from the outbreak of the Covid-19 pandemic. Rating pressures in Central America and the Caribbean also include weaker public finances and narrow financing capacity.

Public finance is the key negative rating driver for most Central American countries as the pandemic exacerbated underlying weak fiscal trends predating 2020. Debt-to-GDP rose by 12.3pp on average, although increases in Guatemala, Mexico and Nicaragua were lower. Tax collection in the region lags rating peers, limiting the governments’ capacity to provide fiscal relief, support the economic recovery and, coupled with high interest payments, signal a relatively narrow fiscal space.

A material increase in unemployment in the region and lukewarm tourism recovery may delay the post-pandemic economic recovery. The slow progress in vaccination remains a latent risk for a prolonged pandemic. The vaccination drive, particularly in Jamaica, Nicaragua and Guatemala, has lagged other regions in the world.

External finances strengthened over the past year as a robust influx of remittances and improved trade balances led to higher foreign reserves (except El Salvador and Costa Rica). The US fiscal stimulus improved disposable personal income and supported higher worker remittances, which provide key funding for private consumption in the region.

Of the nine countries that ���������ֳ� rates in the region (Aruba ‘BB’; Costa Rica ‘B’; Dominican Republic ‘BB-’; El Salvador ‘B-’; Guatemala ‘BB-’; Jamaica ‘B+’; Mexico ‘BBB-’; Nicaragua ‘B-’ and Panama ‘BBB-’) the agency has downgraded five (Aruba, Costa Rica, Guatemala, Mexico and Panama) since the start of the pandemic. Five countries currently carry a Negative Outlook (Costa Rica, Dominican Republic, El Salvador, Nicaragua and Panama).

The report, ‘A Year After the Pandemic: Mexico, Central American & the Caribbean’, is available at or by clicking the link above.


Contact:

Carlos Morales
Director
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Charles Seville
Senior Director
+1 212 908 0277

Media Relations: Elizabeth Fogerty, New York, Tel: +1 212 908 0526, Email: elizabeth.fogerty@thefitchgroup.com

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