Standard & Poor's confirms 'B' rating for Argentina

Ratings agency Standard & Poor's (S&P) confirmed on Thursday that it would maintain its 'B' rating for Argentine debt, highlighting that the national government was continuing to meet the goals laid out by the International Monetary Fund (IMF) as part of the huge credit line agreed last year.

"We are affirming our long-term foreign currency and local currency ratings on Argentina at 'B' and our short-term foreign and local currency ratings at 'B'," the agency said.

The IMF approved a US$56-billion loan package for Argentina to help the Mauricio Macri administration implement a tough austerity programme to stabilise the economy.

"Reflecting strong policy commitment, Argentina continues to comply with challenging targets under its International Monetary Fund (IMF) Stand-By Arrangement, despite a second year of economic contraction and uncertainties ahead of the October national elections," the agency said in a statement.  

Argentina's current economic downturn began with a currency crisis in April 2018 that led the Macri government to request a loan with the IMF. 

Last year the economy contracted 2.5 percent and this year the IMF expects a GDP reduction of 1.3 percent.

"Persistent inflation and pronounced fiscal and external vulnerabilities prompted further adjustment of aspects of the exchange-rate framework, coupled with ongoing policy commitment, which have seemingly stabilised market volatility," said S&P.

"The outlook on the long-term ratings remains stable, based on the balance of risks stemming from the uncertain election outcome, the need for the next government to continue to implement policies to stabilise the economy, slow inflation, and manage fiscal and external financing vulnerabilities and the manageable debt amortisation profile of the next two years," said the agency.

Presidential elections in Argentina will take place in October.

- TIMES/AFP