S&P lowers Argentina’s sovereign debt rating

The risk rating agency Standard & Poor’s (S&P) lowered Argentina’s sovereign debt note on Wednesday due to greater vulnerability regarding the payment of debt in foreign currency.

The rating agency downgraded to “CCC-” (vulnerable investment), from “CCC+”, Argentina’s long-term foreign currency sovereign credit rating, with a negative outlook.

S&P The rating was downgraded after Argentina last week decreed that certain non-financial public sector entities swap or sell their holdings of US dollar-denominated foreign and local law bonds for peso-denominated local law bonds.

For the rating agency, that transaction would not amount to a debt default, but “suggests greater risks and vulnerabilities” around the payment of the debt in foreign currency.

S&P indicated in a statement that the negative rating outlook “reflects the risks surrounding pronounced economic imbalances and political uncertainties before and after the 2023 national elections″.

The economic activity in Argentina experienced an advance of barely 0.3% last January compared to last December, after four consecutive months of contraction, official sources reported on Wednesday.

The data released by the National Institute of Statistics and Censuses (Indec), serves as a provisional advance to measure the quarterly variation of the gross domestic product (GDP), evidence that, despite the progress, the performance is very meager and supports the scenario of stagnation observed by private consultants.

The report indicates that in January economic activity rose 2.9% compared to the same month in 2022, after falling 1% year-on-year in December.

The INDEC data reveals that, of 16 activities included in the indicator, 14 productive sectors showed year-on-year improvements in the first month of the year, among which fishing (81.2%), mining (11.5%) and hotels stood out. and restaurants (8.6%).

Source: EFE