Moody's upgrades Uruguay's rating

Moody's Investor Service upgraded Uruguay's sovereign ratings from Ba1 to Baa3, following Standard & Poor's upgrade announced on April.

The rating action was applied because of the "credit profile that, in general terms, has come in line with that of Baa-rated investment-grade countries."

Moody's assured that a "steady improvement in Uruguay's fiscal metrics coupled with a significant strengthening of the government's balance sheet," and also a key was the "reduced credit vulnerabilities to regional shocks in light of increased diversification and ample liquidity buffers."

The ratings agency backed its decision by stating that the country headed by President José Mujica has registered an "annual growth of more than 6 percent during 2004-2011," same period that has shown "an upward shift in total factor productivity" and that "government deficits have been on the order of 1 percent to 2 percent of GDP."

Moody's highlighted that the government's debt ratio has dropped below 40 percent of the Gross Domestic Product after "reaching nearly 80 percent in 2004."

Earlier this year, Standard and Poor's had also upgraded Uruguay's credit rating.