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29 Aug 2018, Radoslav Yordanov, EMIS Editor

Moody’s lowers 2018 and 2019 growth forecasts for Argentina

Moody’s lowered its 2018 growth forecast for Argentina’s economy to 1% contraction, CEEMarketWatch reported. The rating agency also cut is projection for 2019 to 1% growth.

These downward revisions were mainly motivated by the ongoing currency crisis in the South American country. In this regard, Moody’s expects the depreciation of the peso to have negative impact on Argentina’s sovereign debt, which could increase to 70% of GDP in 2019, up from 50% of GDP in 2017.

Moreover, the credit rater added that the local economy will struggle due to the acceleration of inflation, high interest rates and fiscal tightening. Moody’s raised its prediction for CPI inflation to 32% for 2018 and 22% for 2019.

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