The qualification lowered the note on Argentina's debt and issued severe warnings

The international agency Standard & Poor's lowered Monday the credit rating of Argentina in foreign currency and local B + to B and warned that it could be reduced if the government did not continue with the adjustment and if "unexpected negative political events" further undermine investor confidence.

In terms of projections, the company estimated that GDP should contract by 2.5% this year and by almost 1% in 2019, before picking up modestly in 2020.

"It is likely that inflation will be around 44% and could only gradually fall to 25% by 2019," the rating agency estimates.

He estimated that the general government net debt exceeded 80% of GDP this year, compared with 50% in 2017.

"Argentina's debt profile, the trajectory of economic growth and the dynamics of inflation have eroded after the setbacks of the implementation of its ambitious economic adjustment program, "said the firm.

In his report, he explained: "We have downgraded our long-term sovereign ratings of Argentina in foreign currency and local currency from B + to B and confirmed our short-term valuations of B in foreign currency and in local currency ".

"The outlook for long-term ratings is stable as we expect the government to implement fiscal, monetary and other measures to stabilize the economy over the next 18 months," he said.

Prudence S & P

"We could lower ratings again over the next 12 months if unanticipated negative political events or the improper implementation of the government's economic austerity agenda undermine confidence. investors, worsening the government's access to market financing and possibly putting pressure on the currency, which would affect the dynamics of inflation, "warned the company.

Despite the warnings, the rating agency felt that "the combination of reduced financing needs, lower inflation and interest rates and prospects for continuity of key economic policies after the October 2019 national elections", could lay the foundation for economic recovery and contain external vulnerability. "

"The perception that the commitment of sovereigns in the economic adjustment program could falter after the 2019 national elections would create a similar adverse market momentum, which could result in high interest rates for a long time to come." , did he declare.

He said that "the deterioration of the financial profile of sovereign debt and its access to liquidity to refinance debt maturities could lead to a decline in the rating."

"We could increase ratings over the next two years if the successful implementation of policies resulted in a faster-than-expected decline in inflationexchange rate stability and a deeper recession than expected, "he said.

He estimated that "the forecasts of continuity of economic policies after the elections of 2019 could reverse the recent deterioration of the fiscal, monetary and debt profile of Argentina, as well as improve its growth prospects. long-term GDP ".

Another thumb down

Last week, it was the Fitch rating agency that gave a negative picture of the country's financial situation. On Wednesday, it was learned that Argentina's sovereign debt outlook was "negative" to "negative", due to "intense economic instability" suffered by the country.

According to the agency, "the strong macroeconomic instability of 2018, marked by a sharp depreciation of the peso, has considerably weakened growth prospects in the short term".

Last May, Fitch had reduced Argentina's debt from "positive" to "stable". The firm also estimated that Argentina's economic activity would fall 2.7% this year and 1.7% in 2019.

It also forecast inflation of 47% in 2018 and 27.5% in 2019. Just two months ago, in September, it announced a 2.5% fall in GDP for this year, with 40%.

However, the agency has estimated that the government could achieve its goal of reducing the primary fiscal deficit.

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