Sovereign ratings in Latin America will continue to deteriorate in their fiscal profile over the next two years after several shocks occurred in 2015-16, weakening growth prospects while sovereign debt indicators worsened throughout the region, said Moody’s Investors Service in a new report on the region.
The governments that will have experienced the largest increases in their debt burden for 2019 are according to the firm, Brazil, Ecuador, and Argentina. Meanwhile, those that have had the greatest increase in their interest burden are Colombia, Argentina, and Ecuador.
Also, due to its expected debt indicators, Moody’s concludes that Brazil, Colombia, and Costa Rica are the governments with the least relative fiscal space in the region. Paraguay, Chile, and Peru should also see deterioration in their debt indexes through 2019, although they still keep relatively high levels of fiscal room.
Finally, Moody’s affirms that fiscal consolidation efforts will be key to stop the deterioration of government debt indicators throughout the region and support the credit quality of sovereigns.
The material has been provided by InstaForex Company – www.instaforex.com
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