Monday, 08 February 2021 19:45

Ministry of Finance: The country could have greater economic recovery in the second half of 2021

Written by Cindy Moreno

The minister of Finance, Alejandro Zelaya, projected that by the second semester of the year, the country could have a better economic recovery, after the effects left by the impact of the pandemic in different productive sectors of the country.

Zelaya's statements came after being questioned about the recent report of Moody's Investors Service, which placed El Salvador with a risk category of B3, but changed the outlook to negative.

With this downgrade in the outlook, El Salvador is one step away from falling into category C, which is the so-called "Junk Bonds" due to their high risk of non-payment of commitments.

Countries such as Mongolia, Tanzania and Ukraine are in the current category, as these are considered speculative and are subject to a high credit risk.

The minister accepted that the country is not in its best financial condition, but hopes that this can be corrected.

"We maintain the same risk category and we expect there is going to be a greater economic recovery in the second half of the year", he explained.

He said that the government managed to reduce the financing gap of the 2021 General Budget of the Nation that was at $1,181; an approximate 43 % of said funds are destined to health, education, and security.

"We are now making a greater public investment than in previous years", Zelaya said. "It has been a big change after finding in 2019 a rather restricted budget and a debt of 70 % with respect to the Gross Domestic Product (GDP)", he said.

In addition, he said that one of the measures that have contributed to the rating given by Moody's are the $600 million for the Trust for the Economic Recovery of Salvadoran Companies (FIREMPRESA), as well as the Anti-evasion Plan and, in addition, that the Government of El Salvador has been recognized as one of the best countries in the attention to the pandemic.

Another of the strategies of the Executive Branch that also favors economic recovery is that to date, there are 38 days without homicides.

"This gives good hope to investors, and that is when your risk ratings begin to change", said the minister of Finance.

Last modified on Monday, 08 February 2021 19:53