Moody's has granted "investment grade" to Paraguay, marking a historic and unprecedented event as it is the first time Paraguay has received such a rating.
The investment grade rating is given to borrowers deemed to have a low probability of defaulting on their payments, a seal of approval indicating the country is a reliable debtor. The investment grade rating is given to borrowers considered to have a low probability of defaulting on their payments, a seal of approval indicating the country is a reliable debtor.
This recognition by international markets highlights the efforts made in economic and financial stability, signaling that Paraguay has a stable economy, strong fiscal policies, good debt repayment capacity, and a favorable environment for foreign investment, making Paraguay a more attractive market.
Achieving investment grade status will have several positive effects for Paraguay, including:
- Increased Investor Confidence: It will attract more direct foreign investment, boosting economic growth.
- Reduced Borrowing Costs: It will enable the country to access financing at lower interest rates, benefiting both the government and private companies.
- Economic Stability: It will strengthen the country's macroeconomic and financial stability, reducing volatility and risk.
- Enhanced National Image: It will boost the country's credibility and reputation internationally, facilitating access to markets and opportunities.
- Development Boost: It will foster an environment conducive to the development of infrastructure projects and other key sectors.