IPFS News Link • Economy - International
TEXT-S&P raises Ecuador to 'B/B' from 'B-/C'
• http://in.reuters.comOverview
-- We upgraded the Republic of Ecuador to 'B/B' from 'B-/C' on sustained higher levels of investment that indicate improved growth prospects and higher levels of government revenues.
-- Higher levels of financing from China, combined with increased oil revenues, have allowed for greater public-sector investment.
-- Ecuador's recent history of default and inconsistent economic policies remain as credit constraints. Rating Action On June 7, 2012, Standard & Poor's Ratings Services raised its long-term sovereign rating on the Republic of Ecuador to 'B' from 'B-' and the short-term rating to 'B' from 'C'. The outlook is stable. Rationale The upgrade reflects the perceived improvement in the government's willingness, as well as capacity, to service its debt due to improved financing options and higher oil production and economic growth prospects.
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5 Comments in Response to TEXT-S&P raises Ecuador to 'B/B' from 'B-/C'
I know JV -- he is a lawyer-economist. He has a lot of story to tell about Ecuador's economy, and what went wrong. Don't listen to pseudo-economists whose economics is between their ears.
Ask any economist except Ron Paul -- and this one right below who hears voices between his ears and writes them down.
Yeah. Ask Gary Scott at http://www.garyascott.com/2012/06/05/21983.html.
Or visit International Living Magazine at http://internationalliving.com/countries/ecuador/.
Or ask Simon Black of http://www.sovereignman.com/, who writes articles in Freedom's Phoenix at times.
Then re-ask yourself the Ecuador questions.
Creditworthiness is a science of confidence, not of percentages and numbers. There is no confidence if investment prognosis is marred by contradicting variables ... punctured by so many "ifs". This is IBRD[World Bank]-IMF's traditional nightmare when it conducts a study and recommends measures to economically stricken Third World countries on the red that did not work. In project studies – the res gestae of economic investment -- the primary consideration focuses on how to minimize risks. Once you ponder upon so many imponderables, you lose momentum targeting a higher rate of returns, which means you become unsure of the outcome. Basing a rating out of this uncertainty always leaves something to be desired, believe me ... Reporter Lee has probably no idea what it is.
We are obviously witnessing a potential bias on the part of Mr. Lee. Ecuador's improved rating will not last since the country's new leadership seems to be emulating Castro & Chavez. Towards the end of the review, the S&P study also states: "On the other hand, the ratings could come under pressure if prospects for the oil sector deteriorate significantly or the political environment worsens, leading to instability. Creditworthiness could also come under pressure if higher fiscal deficits lead to a growing debt burden and balance of payments pressures."