Colombia’s rating downgrades will make loans more expensive

Colombia has recently suffered from news in the financial atmosphere not encouraging at all. After the slight economic growth it has caused Gross national product (GDP) in the first quarter of just 0.7%, together with the rise in unemployment from 10% to 11.3% in March, and the downward trajectory of imports and exports, there is another factor: the continued decline in agency ratings risk assessment agencies in the world.

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But just so the reader can understand what the latter is about, it is a situation very similar to what a person reported to risk centers may experience as a result of being unable to meet their credit obligations. Said person scores low in the risk center and that means that the financial system distrusts that person to facilitate new credits.

Colombia is going through this situation. And yes, there are international agents who view the country with suspicion due to factors such as the national government’s proposal to make fiscal rules even more flexible, the Head of State’s reports on the country’s economic situation, the hard fall of the most important segments of the economy, among others. All this has led to big agents and banks like Standard & Poors (S&P), Fitch Ratings, Bank Of America and Moody’s distrust Colombia’s financial management.

Source: El heraldo

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