El Salvador Credit Ratings: Fitch Ratings Affirms El Salvador’s B- With a Stable Outlook Rating

On April 30, Fitch Ratings affirmed El Salvador’s long-term foreign-currency issuer default rating at B- with a stable outlook. The agency upgraded the rating to B- from CCC+ on January 7, 2025.

“El Salvador’s ‘B-‘ rating is supported by a reduction in financing needs and easing of financing constraints and policy anchors under an IMF program,” stated Fitch’s report. 

As of May 2025, El Salvador’s Credit Ratings are B- with a stable outlook from Fitch Ratings, B3 with a stable outlook from Moody’s, and B- with a stable outlook from Standard & Poor’s Global Ratings Agency.

SEE ALSO: Financial Inclusion, a problem that affects many Salvadorans and businesses

Fitch Ratings

In early January, after El Salvador and the International Monetary Fund (IMF) reached a technical agreement for a 1.4 Billion loan, the Fitch Ratings Credit Agency raised El Salvador’s credit rating to B- from CCC+, with a stable outlook.

The Fitch Ratings reaffirmed the January credit rating increase in late April 2025.

In its report, Fitch also noted that “The rating is also supported by lower inflation and a higher GDP per capita than peers but is constrained by moderate growth, high debt levels and interest burdens, and the 2023 pension related debt exchange, which Fitch deemed as a distressed debt exchange.”

Fitch noted that El Salvador’s non-financial public sector fiscal deficit narrowed to 4.4% of GDP in 2024 and is projected to fall to 2.1% by 2026.

The agency said spending cuts and improved tax collection will drive fiscal consolidation, a measure included in the 2025 budget and aligned with commitments to the International Monetary Fund.

However, Fitch warned that non-financial public sector debt reached 87.2% of GDP in 2024 and is expected to remain high, rising slightly to 87.8% in 2025.

While a gradual decline is forecast, supported by primary surpluses, debt levels remain well above the median for B-rated countries, which stands at 52.1%.

The agency also highlighted concerns over the country’s high-interest burden, which accounted for 17.2% of government revenues in 2024, limiting the potential for a rating upgrade.

Moody’s Rating

In November 2024, the rating agency Moody upgraded El Salvador’s credit rating from Caa3 to B3 and maintained its stable outlook for the country.

The upgrade of the ratings to B3 reflects our view that the sovereign’s credit profile has benefited from recent liability management operations that have significantly reduced external amortizations leading to a material decrease in repayment risk and alleviating near and medium-term liquidity pressures. Moody’s.

The Salvadoran government has made three bond buybacks in 2024, and the Ministry of Finance states that this has saved the country $745 million.

Standard & Poor’s Rating

On September 2023, the rating agency Standard and Poor’s upgraded El Salvador’s credit rating from CCC+ to B- and maintained its stable outlook for the country.

“We raised our sovereign credit ratings on El Salvador to B-/B because we consider that the government’s recent program to gradually refinance its short-term debt with local banks will reduce rollover needs and mitigate the risk of a default over the next two years,” noted the credit rating agency.