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S&P Sees No El Niño Impact on Credit Review
An article explains that Standard & Poor's agency expects that the sovereign credit ratings will not be significantly affected by the "El Niño" phenomenon unless it is very strong or if governments take costly support measures. The impact depends on the extent of economic activity disruption caused by the phenomenon and governments' responses to contain it, especially regarding fiscal policies such as support for those affected or price controls, which could lead to increased deficits and debt. The report also notes that countries with flexible currencies, like Colombia and Peru, might handle climate shocks better compared to countries that rely on fixed currencies, such as Ecuador. Although a decline in ratings is not currently anticipated, uncertainty remains about the strength of "El Niño's" impact in the future.
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