Fitch revised Ecuador's ratings outlook to stable from negative, citing developments that have helped mitigate sovereign financing risks in the near term, including a $4.2 billion three-year financing deal with the International Monetary Fund.
Fitch said the IMF program, which was struck in February, facilitated a liability management operation in June that refinanced most of Ecuador's global 2020 bond maturity and "meaningfully reduced" the country's estimated $2 billion financing gap for 2020. The agency estimates that the country still has a $1 billion shortfall for the rest of 2019.
The rating agency said the IMF program "remains on track" and has also provided "an anchor for fiscal consolidation and structural reforms." Ecuador's sovereign debt is projected to rise to 52% of GDP in 2019 from 48% in 2018 before climbing more slowly in the following years due to expected progress in fiscal consolidation.
As part of the ratings action, Fitch affirmed Ecuador's long- and short-term foreign- and local-currency issuer default ratings at B-/B.
