Moody´s rating improves Paraguay

By Ignacio Serratti, Berkemeyer Attorneys & Counselors

The rating agency Moody 's Investors Service in its latest review rose Paraguay´s qualification from Ba3 (stable) to Ba2 (positive), indicating that, due to factors such as the fiscal and financial reforms, the country is with good investment prospects, as well as an economical and political stability.

The improvement in the qualification was mainly due to recent laws passed as Public -Private Alliance, Fiscal Responsibility and to Financial modernization, this last one includes strengthening of macroeconomic indicators , especially debt ratios representing 12.7 % of Gross Domestic Product (GDP ) and 79 % of revenue in 2013, as well as the ability to make payments on the Debt and the redistribution of funds from sovereign bonds.

The agency also took into account the political situation , especially considering the orderly and peaceful transition given from the impeachment of Fernando Lugo , through the administration of Federico Franco and including the current administration. They report that the political landscape had no important impact in the economy or in the credit quality of the country and the technical capacity in both the Ministry of Finance and the Central Bank were stable and strong.

Daniel Correa, Vice-Minister of Economy said that the country is very close to achieve the investment qualification, which should continue to strengthen a healthy and predictable macroeconomic policy and establish a stronger institutional framework for the administration of the State.