The downgrade of two notches came just days after Standard & Poor's downgraded the island's debt by one notch, prompting the local government to file new legislation aimed at shoring up the economy as it prepares to re-enter the bond market this month.
"While some economic indicators point to a preliminary stabilization, we do not see evidence of economic growth sufficient to reverse the commonwealth's negative financial trends," the agency said. "Without an economic revival, the commonwealth will face difficult decisions in coming years, as its debt and pension costs rise."
A spokeswoman for Gov.
Garcia and other top officials have pledged that they would continue to reduce the debt and present a deficit-free budget next fiscal year. Garcia also has said he will strengthen the liquidity of
"It doesn't close the door, but it probably makes a new issuance marginally more challenging," he said.
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