Monday , June 14 2021

The qualifier has downgraded Argentine debt and gave strong alerts



It ran from B + to B

According to the Standard & Poor's agency, the "loan profile in Argentina and the erosion of inflation dynamics" were due to non-compliance with the economic program

Standard & Poor's downgraded Argentine's credit rating from B to B in foreign and local currency on Monday and if the government does not continue to correct it, "unexpected negative political events" can undermine the credibility of the investor.

As for the forecasts, the company estimates that GDP will be 2.5% in 2020 and about 1% in 2019, but will not recover normally in 2020.

"Inflation will be about 44% and will gradually dropping to 25% in 2019," the agency said.

He estimated that the gross government debt would exceed 80% of GDP this year and 50% in 2017.

«Argentina's debt profile, the path to economic growth and the erosion of inflation dynamics took place after it has impeded the implementation of a complex economic correction program, "said the company.

In his report, he commented, "We have lowered Argentina's long-term sovereign rating in foreign currency and local currency from B to B and have confirmed our short-term foreign currency rating and B national currency rating."

"Forecast of long-term ratings is based on our expectations that in the next 18 months the government will implement fiscal, monetary and other measures to stabilize the economy," he said.

S & P be careful

«Unexpected negative political events or uninterrupted implementation of the government's economic savings program can downgrade ratings in the next 12 months investors are likely to aggravate the market's access to market finance and potentially exacerbate the currency that affects the dynamics of inflation, "the company warned.

Notwithstanding the alerts, the rating agency rated this price "Following the national elections in October 2019, low funding needs, inflation reduction and expectations of interest rates and mainstream economic policies, could have a foundation for economic rehabilitation, and may have an external vulnerability. "

"After the national elections in 2019, the desire for a sovereignty program of economic adjustment may create such a negative market dynamics that can lead to high interest rates for a long time," he said.

He pointed out that "the deteriorating financial profile of an independent country and its ability to refinance its refinancing rate could lead to a low rating."

«If the successful implementation of the policy faster than expected inflation, we can cope with the ratings for the next two years, the exchange rate stability and the recession will be deeper, "he said.

He says the expectation of continuity in economic policy following the 2019 elections will allow Argentine's recent deterioration in fiscal, monetary, and debt profiles as well as improve prospects for long-term GDP growth.

You have another sheet below

Last week, the Fitch rating agency has shown a negative attitude to the country's financial position. On Wednesday, Argentina's sovereign debt rating dropped to its "negative" level., due to "intense economic instability" in the country.

According to the Agency, "intensive macroeconomic instability in 2018, due to the depreciation of the pose, has significantly weakened the prospect of growth in the short term".

Last May, Fitch lowered Argentina's debt from "positive" to "stable". The firm has estimated that economic activity in Argentina will drop by 2.7% this year and 1.7% in 2019.

It also predicts inflation at 47% in 2018 and 27.5% in 2019. Only two months ago, in September, he forecasted a 2.5% decline in GDP in September, taking into account 40% of inflation.

However, the agency believes that the government can achieve the goal of reducing the budget deficit.

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