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SANTIAGO (Reuters) – Moody's Investors The service lowered Chile's rating to "A1 "against" Aa3 "on Thursday, in response to a gradual but increasing deterioration in the country's credit profile, despite evidence of better short-term economic and fiscal prospects.
Moody's, who changed Chile's outlook to "stable" from "negative", said that he does not expect the government to get the South American country to recover the credit strength that he had in previous years.
"Chile's fiscal position has deteriorated In recent years, the strength of the government's overall balance sheet, in the opinion of Moody's, is no longer robust enough to offset the weaknesses of Chile's credit profile, "said the entity.
One hundred percent Sebastián Piñera, who took office in March, made several adjustments to his budget to control spending and stabilize public debt, in a context of economic recovery and rising prices of copper, the main export of the country .
Chilean Finance Minister Felipe Larraín said the country "is paying the consequences of fiscal deterioration and weak growth over the past four years".
He pointed out that under the previous government, the debt increased from 35,000 to 70,000 million dollars between the end of 2013 and 2017, reaching a level close to 24% of gross domestic product
. he admitted that "the recovery of risk ranking is a long-term race".
Moody's also said that even though debt indicators will likely stabilize, "it is unlikely that deteriorating fiscal and debt parameters will be reversed."
He added that the use of commodities premiums and external vulnerabilities have also become more noticeable for Chile's credit profile, given the lower growth prospects over the medium term.
In this sense, the agency believes that medium-term growth will be close. 3%, below the expected annual growth rate of 3.7% for 2018.
Moody's decision is in addition to the declines applied last year by Fitch Ratings and the # 39; Agency Standard and Poor Therefore, the Minister of Finance noted that the review of Moody's was coming prematurely.
"It is surprising that this decision comes as the Chilean economy accelerates its growth and that tax revenues exceed market estimates (In technical terms, Moody's appears behind the curve," he said). Larraín
(Report of Antonio de la Jara, edited by Javier López, Javier Leira and Carlos aliaga)
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