El Salvador defaults on pension payment
El Salvador has defaulted on a US$57mn debt payment to the country's private pension fund managers (AFPs), the government said in a press release.
The administration of President Salvador Sánchez Cerén (pictured) failed to reach the necessary 56 votes in congress to make the budget changes that would have made the April payment to the AFPs possible. The debt for the rest of the year is US$230mn, according to the president's office.
The center-left government blames the right-wing Arena opposition for stubbornly opposing budget changes.
"The situation is extremely serious and of unpredictable consequences for the nation," said Sánchez Cerén, who added that it could lead to cuts in the country's credit ratings and higher interest rates for both individuals and companies.
REACTION
The payment default "adds more uncertainty" to an already difficult situation in El Salvador and there is no promise of any short-term solution, said research firm Credicorp Capital.
As for the situation facing El Salvadoran banks, Credicorp Capital noted that "local banks have not provided much information about this situation. Pressure on growth, liquidity, and asset quality cannot be ruled out."
Subscribe to the leading business intelligence platform in Latin America with different tools for Providers, Contractors, Operators, Government, Legal, Financial and Insurance industries.
News in: Political Risk & Macro (El Salvador)
El Salvador insurance market grows despite pandemic, natural disasters
Net premiums grew to US$722mn in 2020, according to the insurance association's latest report, while an expert told BNamericas that more work on th...
What to expect from Bukele's historic win
With over 90% of the vote cast, the ruling Nuevas Ideas party looks set for the two-third majority rule that would enable President Nayib Bukele to...
Subscribe to Latin America’s most trusted business intelligence platform.
Other projects
Get key information on thousands of projects in Latin America, from current stage, to capex, related companies, key contacts and more.
- Project: Borborema
- Current stage:
- Updated:
1 day ago
- Project: Veracruz hydroelectric plant
- Current stage:
- Updated:
1 day ago
- Project: Boboke hydroelectric project
- Current stage:
- Updated:
1 day ago
- Project: Valencia hydro plant (Patuca 2) (Patuca hydroelectric complex)
- Current stage:
- Updated:
1 day ago
- Project: Modernization of the Chiclayo International Airport
- Current stage:
- Updated:
1 day ago
- Project: Variants of the Libertador Transversal between Popayán - Crucero - Totoró - Inza and La Plata
- Current stage:
- Updated:
1 day ago
- Project: Becker
- Current stage:
- Updated:
1 day ago
- Project: Electrification of the Mayan Train
- Current stage:
- Updated:
1 day ago
- Project: Biomethane Plant
- Current stage:
- Updated:
1 day ago
- Project: Los Montones Photovoltaic Power Plant
- Current stage:
- Updated:
1 day ago
Other companies
Get key information on thousands of companies in Latin America, from projects, to contacts, shareholders, related news and more.
- Company: Quasar Energía Ltda.  (Quasar Energía)
-
The description contained in this profile was taken directly from an official source and has not been edited or modified by BNamericas researchers, but may have been automatical...
- Company: Logytech Mobile SAS.  (Logytech Mobile)
-
The description contained in this profile was taken directly from an official source and has not been edited or modified by BNamericas researchers, but may have been automatical...
- Company: EdgeconneX Chile
- Company: Solar Las Marías S.A.S.E.S.P.
- Company: Consórcio Infraestrutura MG
- Company: OHLA Panamá