MercoPress. South Atlantic News Agency

S&P Raises Uruguay Outlook to Positive

S&P has raised its outlook on Uruguay's B+ sovereign credit rating to positive from stable to reflect expectations of a sustained implementation of the economic policy agenda.

The agency anticipates the consolidation of a stronger macroeconomic framework and implementation of policy reform. "Recent liability management operations-including the replacement of all IMF indebtedness with longer tenured capital market debt and additional debt swaps taking advantage of market conditions-provided additional flexibility to public finances over the short to medium term," says S&P. Uruguay's net general government debt is expected to decline to 50% of GDP at year-end 2007, down from 93% in 2003. Net public sector external debt also declined substantially over the same period, and is expected to constitute 80% of CAR at year-end 2007, compared to a high 212% in 2003. But this still compares poorly to the B median's 32% net general government debt to GDP and 43% net public sector external debt to CAR, says the agency.