The regional vice president for the entity, Gabriel Torres, explained that Argentina faces four credit challenges in the short and medium term, which have to do with the political transition, with an economy in recession, with the default and restructuring of the debt, and with a new agreement with the International Monetary Fund, during a seminar organized this Thursday (26.09.2019) at the Four Seasons hotel.
According to Torres, The first challenge is the political transition , due to the strong financial impact that the results of the PASO had. «Reserves fell by around 30% in the month after the PASO, and in 2015 (election year) there was a similar situation, the government was running out of reserves.«, It remembered.
The second challenge, according to the analyst, is the level of activity, in as much as "The economy has not grown since 2011, this year it could fall by 4%, and by 2020 it would fall for the third consecutive year, as we expect a 2,5% decrease in GDP. Since 2011, Argentina has been in a scenario of high volatility."
As for the third challenge to face is a debt restructuringTorres pointed out the difficulty Argentina has in accessing markets.Measured as a percentage of GDP, Argentina's payments are not that high; what affects the country most is that it does not have access to the markets."s," he said.
The final challenge is pending the need for a new agreement with the IMFFor Torres, everything would indicate that "Argentina will renegotiate the agreement with the Fund, although obtaining more money will not be easy; in fact, I am inclined to believe that the agreement would be to extend the payment terms," would be the most likely scenario.
However, he warned that "When the IMF makes these kinds of negotiations, it demands something in return, since extended facility loans require structural reforms, and we will have to see whether the new government will accept that or not. It will be a big challenge."
Finally, the rating agency presented its usual economic projections, which predict a 2,5% drop in GDP for 2020, inflation of 40% and an average dollar at $70. Meanwhile, it added that the debt rating remains at Caa2 with a negative outlook due to the risks of future restructuring.
Key credit challenges of #Argentina 2019/20 - Default and restructuring: “Measured as a percentage of GDP, Argentina's payments are not that high. What affects the country most is that it does not have access to the markets,” says Gabriel Torres, Moody's.#MDYArgentina19 pic.twitter.com/ogb76tq55J
— Moody's Latin America (@MoodysLatAm) September 26, 2019
Aduana News foi o primeiro jornal aduaneiro da Argentina a lançar sua versão digital. Com mais de 20 anos de trajetória, suas publicações e iniciativas têm como objetivo oferecer o conhecimento mais relevante sobre temas aduaneiros, contribuindo para a promoção do comércio seguro e da facilitação do comércio na região.
