The Argentine economy will face a recession that will last until 2019 with low refinancing risks

The Moody's Investors Service points out in a new report that, although Argentina's credit profile (B2, stable) is supported by a high level of economic development compared to its peers, multiple economic shocks and the adoption of contractionary policies will drive the Argentine economy to record a recession in 2018-19. On the other hand, IMF financing will significantly reduce the need for the sovereign to use international capital markets to cover its financing needs, which means that the government will be virtually protected from financing risks. external until the end of 2019. [19659003] "The historical volatility of the Argentine economy affects the profile of sovereign credit.After years of intermittent growth during the period 2011-2017, the l 39 Argentina's economy will shrink by 2.5% and 1.5% respectively in 2018 and 2019, "said Gabriel Torres, head of credit at Moody's. "Economic growth has been volatile due to several shocks, including a historic drought, a protracted currency crisis and the adoption of restrictive fiscal and monetary policies by the government."

The sharp devaluation of the Argentine peso, which depreciated more than 50% against the US dollar this year, contributed to the considerable deterioration of the state budget credit indicators. Moody's forecast that public debt will reach about 70% of GDP this year and that interest payments will account for 16% of revenues. A large proportion of public debt denominated in foreign currencies, which currently exceeds 70%, exposes the sovereign credit profile to exchange rate fluctuations.

The stable rating outlook reflects Moody's expectations regarding government policies. Argentina will align with the objective of reducing the budget deficit and the current account, integrated in the agreement with the IMF.