Chile should improve its country-risk index in 2010

According to the international rating companies, Chile’s good management of the crisis should raise it to levels AA3 and A+, on a par with European nations.


Good management of the global economic crisis should allow Chile to continue climbing on the country-risk rating scale, according to Moody’s and Fitch, the most respected rating companies in the world.


While for some economies the financial debacle involved a sharp decline in this index, for Chile it was an opportunity to prove its financial, political and social stability.

«Chile is a great example for us, because first it saved and now it can spend more freely”, states Moody’s analyst Gabriel Torres. “We increased Chile’s rating in the middle of this crisis –in March 2009– and we still consider it in a positive perspective and may increase it again”.

The agency is planning to review Chile’s current rating in the next few months. And everything suggests that the country will increase again, reaching the AA3 level. «It would be at the same level as most of the European countries. It’s possible we may take a look in 2010 and see how things are going. At the moment, we think it is very likely that we will increase it”, says Torres.

In turn, Fitch Rating also recognizes Chile’s efforts. In May of this year it confirmed the A rating it had given it last November, and with the new scenario of economic reactivation it could continue its climb.

«It’s possible that we may change the rating without modifying the perspective. It could be an A+ (one notch higher) with a stable perspective, if we see that the economy is ready to stay in that category until longer-term issues change”, commented Casey Reckman, an analyst of the company.

According to the experts, the big outstanding challenge for the country is the need to progress on structural issues. Among them, reducing dependency on copper prices and advancing toward greater flexibilization of the economy. These improvements would help Chile rise on the scale of the country-risk indices.