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Montevideo, December 15th 2017 - 06:16 UTC

Argentina climbs one level in Moody's rating, but still below investment grade

Saturday, December 2nd 2017 - 09:45 UTC
Full article 3 comments
Moody’s raised Argentina’s rating to B2 from B3 with a stable outlook, Moody’s analyst Gabriel Torres said in a statement. Moody’s raised Argentina’s rating to B2 from B3 with a stable outlook, Moody’s analyst Gabriel Torres said in a statement.

Argentina’s credit rating was raised one level by Moody’s Investors Service as President Mauricio Macri’s macroeconomic reform policies seem to have started to take hold, bolstering optimism about the nation’s long-term prospects.

 Moody’s raised Argentina’s rating to B2 from B3 with a stable outlook, Moody’s analyst Gabriel Torres said in a statement. That leaves the nation five levels below investment grade, on par with Angola, Nigeria and Cambodia. S&P raised its rating on Argentina by one level in October to B+.

Macri has implemented policies since 2015 including a free-floating exchange rate, open capital account and more credible public statistics. Torres said the revamp will probably continue after midterm elections in which Macri’s Cambiemos coalition won almost 42% of all votes in the lower house of Congress, reinforcing its political position.

While Argentina must still contend with high fiscal deficits, stronger and balanced growth will strengthen its fiscal and external positions over time, Torres said. The Macri administration has announced plans to reduce the fiscal deficit and tax, pension and labor reforms.

“Economic growth appears to be more sustainable than prior consumption-led booms,” Torres wrote. “After years of stop-and-go economic growth, Argentina is poised to grow two years in a row in 2017-18, the first time since 2011.”

Argentina plans to reduce its dependence on international finance markets, Treasury Minister Nicolas Dujovne told foreign correspondents. Dujovne estimated that the local capital market is expanding by about 25% year-on-year, and further debt can be taken on internally.

The government plans to issue around US$30 billion of net debt next year, and expects the debt ratio to stabilize in 2020. The country will grow 3% this year and 3.5% in 2018, according to Moody’s projections.

 

Categories: Economy, Argentina.
Tags: Argentina.

Top Comments

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  • Marti Llazo

    .... but still below investment grade....

    Also technically known as Junk Bonds.

    Dec 02nd, 2017 - 08:48 pm 0
  • imoyaro

    At least it is a step above toilet paper, and definitely worth more than “gold” in World of Warcraft...

    Dec 03rd, 2017 - 10:40 am 0
  • Marti Llazo

    And to think that not so long ago the bond credit rating under the Kirchner government was “Junk in Default.”

    It's a big hole to crawl out of, but at least somebody thinks they're headed in the right direction. Though personally I wouldn't invest in any Argentine Submarine Renovation Facility 10-Year Bonds.

    Dec 03rd, 2017 - 01:58 pm 0
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