Moody's on Aug. 1 changed its outlook on Bolivia's issuer and senior unsecured bond ratings to stable from negative, citing the country's stabilizing fiscal and current account deficits. It also affirmed the ratings at Ba3.
The country's current account balance stabilized at 5.5% of GDP in 2016 from a deficit of 5.6% of GDP in 2015. The fiscal deficit narrowed to 3% of GDP in 2016 from 4.5% the previous year.
Investment spending dropped to 31.4% of GDP in 2016 from 36.1% in 2015. Moody's expects a similar level in 2017.
The rating agency said that the fiscal and external buffers are likely to support Bolivia's sovereign credit profile amid weak energy prices.
Bolivia's GDP grew an average of 5.3% over the last five years, outpacing the median of Ba-rated sovereigns of 3.3% over the same period. Although growth has slowed in the past two years, it will remain above the median for Ba-rated sovereigns, said Moody's.