Fitch affirms Colombia's BB+ rating with stable outlook

By Ovunc Kutlu

ISTANBUL (AA) - Fitch Ratings said Wednesday that it affirmed Colombia's long-term foreign currency issuer default rating at BB+ with a stable outlook.

The agency said Colombia's ratings reflect the country's track record of macroeconomic and financial stability.

The ratings, however, are constrained by high fiscal deficits, a high-interest burden, and high dependence on commodities.

Fitch said it expects the central government's fiscal deficit to widen to 5.6% of GDP this year, from 4.3% last year.

Fiscal deficit, meanwhile, is also expected to improve modestly to 5.2% of GDP, as an economic rebound improves revenues while spending is kept relatively flat in nominal terms, the agency said in a statement.

It projects consolidated general government debt rising to 57.7% of GDP in 2026, from 53.7% in 2023.

Colombia's GDP growth is expected at 1.5% for this year, picking up to 2.8% next year and reaching a pace of 3% in 2026, as less restrictive monetary policy drives higher consumption and investment, the statement said.

"Domestic demand remains weak due to continued tight monetary policy, as ex-ante real rates remain high despite the beginning of the central bank's cutting cycle," it added.