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DBRS maintains Colombia's ratings

DBRS on April 29 confirmed Colombia's long-term foreigncurrency issuer rating at BBB and long-term local currency issuer rating atBBB(high).

The rating agency also confirmed the short-term foreigncurrency issuer rating at R-2 high and short-term local currency issuer ratingat R-1 (low). The ratings trend is stable.

Colombia's sound macroeconomic management and solidmedium-term growth prospects support its ratings, DBRS said. Near-termchallenges abound, however, including widening external and fiscal deficitsamid lower oil prices, weaker demand from regional trading partners, risinginflation and less favorable external financing conditions.

The government has tightened its macroeconomic policy bymoderating domestic demand and facilitating a gradual reduction inmacroeconomic imbalances, DBRS noted. Colombia's medium-term prospects are alsocomparatively strong and could outperform expectations, but this reliant on theprogress of the fourth generation (4G) infrastructure program, the passing ofcomprehensive tax reform and a peace deal agreement.

Meanwhile, the stable trend relies on the possibility of therevenue-raising tax reform being passed by the end of the year. "If taxreform is not passed, concerns about fiscal sustainability will intensify andlikely result in downward pressure on the ratings," DBRS said.