The BB- Rating
The Government is obliged to analyze and explain why, since records began (1993), Colombia has fallen to such a low level in credit rating, even worse than the pandemic or the 2015 oil crisis.
TL;DR
- Colombia's credit rating has fallen to BB-, described as 'high speculation' or 'junk bond' status.
- This downgrade is the lowest since 1993, surpassing the pandemic and 2015 oil crisis.
- Direct consequences include a higher cost of living and increased interest rates for financing.
- The government is urged to explain the fiscal policy and Ecopetrol's increased expenditures.
- S&P warned against covering the fiscal deficit by maximizing dividend collection from Ecopetrol, citing governance issues.
- Analysts recommend increased fiscal discipline, returning to the Fiscal Rule, and prioritizing productive investment.
- Respecting the autonomy of the Central Bank and ensuring technical management of state entities are deemed imperative.