MercoPress. South Atlantic News Agency

Argentina “stronger” than Brazil

United States risk assessment agency Standard & Poor', S & P, declared that Argentina “is in a far stronger situation than Brazil, mainly because of the implementation of the zero deficit budget policy”.

Graciana del Castillo, S & P Chief Latinamerican Desk Economist indicated that "countries such as Argentina that are not forced to appeal to the short term credit market, are in a far stronger position than others which depend on loans for their current account deficit".

"We're going through a similar situation to that following the Russian crisis when all markets were closed for emerging countries", added economist Del Castillo, adding, "undoubtedly markets feel Brazil is more vulnerable since its highly dependent on overseas financing of its 5% current account deficit".

However, Del Castillo pointed out emphatically that "zero-deficit" depends on "the political cohesion and will behind the measure, particularly now when many Latinamerican governments don't have sufficient Congressional support".

"They're very tough measures but essential for countries such as Argentina given the current risk aversion of international investors".