Moody’s believes Argentina will grow 3.5% next year and reduce deficit
Buenos Aires, December 19 (.) .- The US agency Moody’s today published a report which projected a growth of Argentina’s economy of 3.5% in 2018, a year in which they believe that inflation will also be reduced to the 15% and begin to reduce the fiscal deficit.
In a text aimed at resolving possible doubts of investors, the rating agency said the Argentine GDP, after dropping by 2.3% last year and increase by 3% in 2017, growth will accelerate next year to 3.5 %.
“We expect the economic recovery of Argentina continue in 2018 and 2019,” Moody’s, which also predicted that next year inflation will fall, “but gradually” to about 15% said.
Another variable that saw the US credit rating is the fiscal deficit, which, although it remains “high”, situated in decline for the first time since Macri came to power in late 2015, at 5.5% in 2018 and below 5% in 2019, by “lower spending targets”.
In 2016 a deficit of 5.9% this year and 6% was recorded, which blamed the agency in its first two years Macri “chose to focus on macroeconomic stability rather than addressing the growing fiscal deficit.”
The report of the US company also raised the “ambitious” reform agenda of the government, among which highlighted the tax, which will reduce revenue to try to boost investment and growth; and pension, which seeks to cut the deficit with lower outlays on benefits.
The third amendment to the text referred is the work that through “lower costs” for entrepreneurs looking for a “more competitive” of the southern country.
Although Moody’s raised the rating of Argentina less than a month ago to B2 -even within the considered “junk bond” – based on the “improvement” of the economy and “policies” of the nation, said in this note continues to weigh its history of “weak institutions and growing external imbalances.”
For a further improvement in its debt rating, the agency demanded that Argentina reductions in the fiscal deficit and inflation “consistent and credible” and a “continuation and deepening of the current political stance”.
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