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Fitch Ratings has assessed the Colombian Ministry of Transportation's decision to freeze above-inflation tariff increases as neutral for its rated toll road projects.

Colombia’s economy grows, but high rates and delayed tax collection hinder progress. Floods rise, La Niña looms, and the wage debate continues.

The outlook change reflects Fitch’s anticipation of improved business profile and financial performance following the ongoing merger with HDI Seguros S.A.

Fitch says it would also consider a further upgrade if Gran Tierra diversifies its operations and enhances oil and gas sales prices.

Despite political reluctance for tax hikes, property tax adjustments may aid in covering potential revenue gaps.

Though Cartagena's risk profile has weakened, the city still appears able to service outstanding debt according to covenants.

Economic deceleration, a period of high inflation, and increased income inequality and poverty rates following the pandemic underpin risks to social and political stability.

The acquisition allowed OCENSA to invest its excess cash in an asset that Fitch expects to generate stable, permanent dividend cash flows for the company.

Fitch says gpvernment-controlled enterprises may raise fiscal pressures and financing needs of governments that already face sizeable fiscal challenges.

Downgrades exceeded upgrades 2-to-1 compared to 4.3x during 1Q24 and 7.1x during 4Q23.