Colombia remains the weakest link in LatAm IG

Elsewhere in the LatAm IG credit space, Colombia remains the weakest link, given its fiscal reliance on the oil sector and the expectation that fiscal reform will not happen in the short term. 

In the absence of structural tax reforms, Colombia's ability to put the debt/GDP ratio back on a declining trend could be put at risk. In this respect, recent developments have not been favourable for fiscal reform. 

President Santos has said that he does not believe fiscal reforms will be introduced in the near term and highlighted the government is focused on growth and tax evasion reduction. 

The guerrilla attack that killed 11 armed forces members has reshaped public opinion about the peace process and has hurt President Santos's popularity, limiting his capacity to pass fiscal reform in the near term. 

A potential peace agreement in 2015 was critical to pass fiscal reforms to finance the peace process, says Barclays.