NEW YORK, March 7 (Reuters) - Uruguay landed its third major investment-grade debt rating on Thursday as Fitch became the last of the largest rating agencies to give the South American nation its seal of approval.
Fitch raised Uruguay to BBB-minus from BB-plus, citing economic resilience as well as the political and social stability of the country, squeezed between Brazil and Argentina.
The outlook is stable, Fitch said in a statement.
Uruguay’s President Jose Mujica - a former leftist guerrilla leader - has promoted investment by sticking to a fairly orthodox policy menu.
“Uruguay’s social and political stability, strong institutions and relatively high per capita income are characteristics that are fully in line with investment-grade sovereigns,” Fitch said.
The International Monetary Fund expects Uruguay’s economy to grow by 4 percent this year, slightly faster than that of Brazil, Latin America’s biggest economy.
Fitch noted the possible effects Uruguay’s larger neighbors could have on the smaller country’s economy.
“Fitch assumes that Argentina’s economic difficulties will have only a limited spillover in Uruguay due to Uruguay’s strengthened external buffers and the reduced trade and financial links between the two countries in recent years,” it said.
“In addition, Fitch expects economic growth in Brazil, Uruguay’s main trading partner, to recover in 2013.”
Standard & Poor’s also rates the country BBB-minus with a stable outlook. Moody’s Investors Service rates Uruguay Baa3 with a positive outlook.