Honduras now has a rating equal to that of the Congo and Argentina.
The reason: the widening fiscal deficit of the Honduran government. Moody's places Honduras's credit rating as tied for the worst rating in Central America:
Costa Rica Baa3
El Salvador Ba3
Moody's describes Baa as a low risk investment, Ba as a somewhat risky investment, and B as a risky investment.
Porfirio Lobo Sosa was supposed to get the government budget under control in 2013, but he didn't. Instead, he let it balloon out of control, and the deficit went from 5.9% of Honduras's gross domestic product to 7.7 % of the GDP.
This news comes as Juan Orlando Hernandez celebrates his first 30 days in power, and amid reports that in general, investors are counting on him to turn the fiscal deficits around.
They just don't believe Honduras will achieve the goals his administration has set.
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