/raid1/www/Hosts/bankrupt/TCRLA_Public/231129.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
L A T I N A M E R I C A
Wednesday, November 29, 2023, Vol. 24, No. 239
Headlines
A R G E N T I N A
ARGENTINA: Heading For 'Shock' Fiscal Therapy, Milei Says
PROVINCE OF JUJUY: S&P Affirms 'CCC-' Long Term ICRs
B R A Z I L
AMERICANAS SA: To Get $4.9 Billion Capital Increase in Debt Deal
BRAZIL: Sees Steel Production Dip in 2023
J A M A I C A
JAMAICA: Forex Market Relatively Stable, Says BOJ
JAMAICA: Trade Deficit Declined for January to July
P E R U
PERU: Economy Slides 1.29% in September, Missing Forecasts
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A R G E N T I N A
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ARGENTINA: Heading For 'Shock' Fiscal Therapy, Milei Says
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Buenos Aires Times reports that President-elect Javier Milei has
promised economic shock therapy to balance Argentina's budget next
year in an effort to avoid hyperinflation.
Fresh off his landslide election win, Milei reiterated that he will
drastically cut government spending because "there's no money,"
according to Buenos Aires Times.
Failure to do so would further boost consumer prices that are
already soaring more than 140 percent a year, their fastest pace
since the early 1990s, he warned, the report notes.
"If we don't do the fiscal adjustment, we're going to
hyperinflation," the La Libertad Avanza leader said in an extensive
radio interview, notes Buenos Aires Times. "I'm going to do a shock
adjustment," he added.
Milei provided few details of how he would balance the budget,
saying his still-unnamed economic team would tackle the Central
Bank's balance sheet of short-term debt, the report notes. He
added that interest payments on peso bonds made by the monetary
institution amount to 10 percentage points of gross domestic
product, the report relays.
Milei also insisted that spending cuts wouldn't affect ordinary
citizens but rather the political class and its allies, the report
says. He indicated that public works projects would need private
capital, the report discloses.
The president-elect met with outgoing President Alberto Fernandez
at the official residence on the outskirts of the capital to start
the government transition, the report notes. He said he joked with
Fernandez about becoming the next "tenant" at the property, but
then didn't spare his administration of criticism, saying its
excessive spending "planted hyperinflation," the report discloses.
"There's a very clear mandate," Milei said in the interview. "My
commitment to Argentines is to exterminate inflation," he added.
If not, he argued, Argentina would end up like Venezuela, the
report relays.
The libertarian lawmaker won a resounding victory in the
presidential election, trouncing Economy Minister Sergio Massa by
12 points with a pledge to end decades of unbridled state spending
and "end the decline of Argentina," the report relays.
Inflation Target
Earlier, Milei said that it could take between 18 and 24 months to
bring rampant inflation under control, recounts the report.
"First, we will start with the reform of the state, to very quickly
put public accounts in order," the libertarian economist told Radio
Mitre, the report says.
In a series of morning radio interviews to lay out his vision, he
said he had a "clear plan" to tackle annual inflation that has hit
143 percent and a poverty rate of 40 percent, the report notes.
During the campaign, Milei vowed to ditch the ailing peso for the
US dollar and get rid of the Central Bank, which he accuses of
fuelling inflation by printing money to finance government
overspending, the report recalls. "The empirical evidence for the
Argentine case says that if you cut monetary emission today, it
takes between 18 and 24 months to destroy [inflation]," he added.
"Closing the Central Bank is a moral obligation. Dollarisation is
to get rid of the BCRA [Central Bank]. We propose that the
currency should be the one chosen by individuals," he said, the
report relays. "Argentina is in an extremely delicate situation and
we are with the best professionals to rebuild the country."
However, reports suggested that dollarisation plans had been put on
the back-burner until other pressing issues were resolved, the
report notes.
On his plans to reform the government, Milei said "everything that
can be in the hands of the private sector is going to be in the
hands of the private sector," including the state oil company YPF
and state media, the report relays.
He said he would push for the elimination of strict currency
exchange controls - with analysts saying the official rate of the
peso to the dollar is an expensive fiction, the report says.
However, Milei said he would first seek to resolve the Leliqs note
debt issued by the Central Bank, the report discloses.
"It is not possible to solve the problem of the exchange-rate cepo
if the problem of the Leliqs is not solved. It is the other side of
the coin," Milei told Radio Rivadavia, the report notes. "If the
problem of the Central Bank is not resolved, the shadow of
hyperinflation will follow us at all times."
About Argentina
Argentina is a country located mostly in the southern half of South
America. Its capital is Buenos Aires. Alberto Angel Fernandez is
the current president of Argentina after winning the October 2019
general election. He succeeded Mauricio Macri in the position.
Argentina has the third largest economy in Latin America. The
country's economy is an upper middle-income economy for fiscal year
2019, according to the World Bank. Historically, however, its
economic performance has been very uneven, with high economic
growth alternating with severe recessions, income maldistribution
and in the recent decades, increasing poverty.
The IMF's executive board completed on August 23, 2023, the fifth
and six reviews of Argentina's 30-month Extended Fund Facility
(EFF), and approved a US$7.5-billion disbursement to Argentina as
part of the larger program, which refinances payments Argentina
owes the institution from a previous bailout that failed to
stabilize the economy in 2018. Argentina would receive another IMF
disbursement in November of about US$2.75 billion pending another
staff-level agreement and board approval.
S&P Global Ratings, on June 13, 2023, raised its local currency
sovereign credit ratings on Argentina to 'CCC-/C' from 'SD/SD' and
0its national scale rating to 'raCCC+' from 'SD'. S&P also affirmed
its 'CCC-/C' foreign currency sovereign credit ratings on
Argentina. The outlook on the long-term ratings is negative. S&P's
'CCC-' transfer and convertibility assessment is unchanged. None of
its rated bond issues are affected.
S&P said the negative outlook on the long-term ratings is based on
the risks surrounding pronounced economic imbalances and policy
uncertainties before and after the 2023 national elections.
Divisions within the government coalition, and infighting among the
opposition, constrain the sovereign's ability to implement timely
changes in economic policy.
Fitch Ratings also upgraded on June 13, 2023, Argentina's Long-Term
Foreign Currency (FC) Issuer Default Rating (IDR) to 'CC' from
'C'and affirmed the Long-Term Local Currency (LC) IDR at 'CCC-'.
Fitch typically does not assign Outlooks to sovereigns with a
rating of 'CCC+' or below.
The upgrade of the FC IDR reflects that Fitch no longer deems a
default-like process to have begun, as the authorities have not
signaled a clear intention to follow through with an intra-public
debt swap announced in March. The new 'CC' rating signals a default
event of some sort appears probable in the coming years, regardless
of the outcome of upcoming elections. The affirmation of the LC IDR
at 'CCC-' follows the peso debt swap in June that Fitch did not
deem to be a "distressed debt exchange" (DDE).
Moody's Investors Service, in September 2022, affirmed Argentina's
Ca foreign-currency and local-currency long-term issuer and senior
unsecured ratings. The outlook remains stable. The decision to
affirm the Ca ratings balances Argentina's limited market access,
weak governance, and history of recurrent debt restructurings with
recent efforts to marshal fiscal and monetary measures to start
addressing underlying macroeconomic imbalances in the context of
the IMF program that was approved in 2022, according to Moody's.
DBRS, Inc. confirmed Argentina's Long-Term Foreign Currency Issuer
Rating at CCC and downgraded its Long-Term Local Currency Issuer
Rating to CCC from CCC (high) on March 3, 2023.
PROVINCE OF JUJUY: S&P Affirms 'CCC-' Long Term ICRs
----------------------------------------------------
On Nov. 27, 2023, S&P Global Ratings affirmed its 'CCC-' foreign
and local currency long-term issuer credit ratings on the province
of Jujuy. The outlook remains negative.
Outlook
Similar to other local governments in Argentina, the negative
outlook on S&P's ratings on Jujuy reflects Argentina's difficult
economic dynamics including its vulnerable external liquidity,
which has raised pressure on the foreign-exchange (FX) market.
While Argentine provinces in general have been improving their
finances in recent years, they depend on the availability of
foreign currency to service their debt. The central bank's
international reserves have shrunk because the severe drought that
depressed agricultural exports this year and due to weakening
foreign-currency inflows, limiting the ability of local and
regional governments (LRGs) to convert or transfer money for timely
debt service.
Downside scenario
S&P said, "We could lower the long-term ratings on the province of
Jujuy if the central government further tightens access to FX,
which could impair the provinces' ability to service foreign
currency debt in the next six to 12 months. In addition, we would
consider a debt exchange or restructuring as distressed and
tantamount to a default at such a low rating level."
Upside scenario
S&P said, "We could raise the ratings in the next 12 months if we
see improvement in conditions for LRGs' access to foreign currency
to service debt, leading to a higher transfer and convertibility
(T&C) assessment. A track record of the sovereign's successful
execution under the IMF's Extended Fund Facility (EFF), coupled
with clarity on how policy will ease financing strains and provide
a road map to address Argentina's major structural macroeconomic
imbalances, would be positive for local governments."
Rationale
The 'CCC-' ratings on Jujuy are capped by our T&C assessment that
reflects persistent pressures on the foreign currency markets, as
seen in the low levels of international reserves. This translates
into risks for Jujuy in servicing its foreign currency denominated
debt.
S&P expects cash accumulation in 2019-2022 and flows from the
Cauchari solar park to help Jujuy face upcoming headwinds and
servicing debt. However, pressure on provincial governments'
revenue and expenditure is substantial in 2023, while there are
risks of additional pressure through cuts in non-automatic
transfers, although they have been decreasing as a share of Jujuy's
revenue.
S&P expects fiscal and cash buffers, accumulated in the past three
years, to shrink
S&P's base-case scenario assumes Jujuy's operating surpluses of 10%
of operating revenue on average in 2023-2025, down from 19% on
average during 2021-2022. Fiscal pressure is eroding the province's
finances in 2023, as high inflation and social protests in the
province over changes to its constitution have led to more frequent
negotiations over public workers' salaries. Meanwhile, revenue has
diminished because of the economic contraction and the national
government's decision to lower the income tax, a key component of
the co-participation base for provinces, which started to have an
effect in November. Overall transfers from the national government
represent just above 75% of provincial revenue, although this
percentage has been declining. Of total transfers, about 8% are
nonautomatic, and we assume there will be cuts as the national
government advances its fiscal adjustment plan.
S&P expects moderate deficits after capital accounts, of about 2.5%
of total revenue in 2023-2025, which incorporate a drop in public
works expenditure to roughly 13% of total spending from almost 19%
in 2022 amid macroeconomic uncertainty. Jujuy will likely continue
to finance capital expenditures through its own resources, although
the province also has ongoing projects funded by multilateral
lending institutions (MLIs) such as CAF-Development Bank of Latin
America and the Caribbean and Central American Bank of Economic
Integration. Key projects include improvements in education and
health, connectivity, and a tourist railway. The province also
plans to expand the solar farm through a new loan from the
Export-Import Bank of China, still pending approval from Congress.
Improvement in the province's fiscal performance in recent years,
partly thanks to high inflation as revenue adjusts faster than
spending (especially payroll), led to accumulation of liquidity.
Cash flows from the Cauchari solar farm since 2021 will continue to
support debt service. Cauchari's contract with local energy
distributor CAMMESA is in U.S. dollars with payments made in
Argentine pesos at the official rate, which is currently also the
rate at which the province acquires U.S. dollars to pay debt, thus
limiting currency risk on these flows of the equivalent to $48
million annually. Given that Argentine provinces can't save in
foreign currency, maintaining savings' value has been a key
challenge. Jujuy has been investing mostly in national and
provincial government notes linked to FX or inflation, and common
investment funds.
S&P said, "We believe strains will mount and that the liquidity
coverage will erode in a likely depreciation scenario, as 90% of
debt is in U.S. dollars. Discounting holding of central and
provincial government paper, according to our stressed scenario, we
estimate that free cash will cover less than 20% of debt service
payments for the next 12 months."
Total annual debt service total almost $80 million in 2023 and $100
million in 2024, most of which consist of the green bond and loan
the Export-Import Bank of China, and the remainder made up of loans
from MLIs and financial institutions like BBVA Hong Kong. Loans
from the Export-Import Bank of China and MLIs were contracted
through the national government, so payments are deducted from
co-participation transfers, but the province still needs access to
the central bank's reserves for servicing its green bond.
S&P incorporates the planned new debt for the solar park's
expansion of an estimated $210 million from the Export-Import Bank
of China, negotiations for which have been ongoing for some time.
Debt will remain at similar levels of about 60% of total operating
revenue. Jujuy's debt level is higher than those of other Argentine
provinces but has been decreasing due to limited financing options
and real appreciation of the official exchange rate. The Argentine
peso's deeper-than-expected depreciation could increase debt.
Fiscal planning is limited by macroeconomic imbalances and weak
institutional predictability
S&P expects difficult macroeconomic conditions in Argentina and
Jujuy. A myriad of economic imbalances generate complex conditions
for the Milei administration even before it takes office. If, how,
and when the president-elect plans to proceed with formal
dollarization, a key campaign promise, isn't clear. This in part
stems from the low level of gross international reserves, which are
$21 billion--and negative in net terms--given macroeconomic
misalignments, the financial hit from the severe drought this year,
and capital outflows despite pervasive FX restrictions. The already
fragile fiscal accounts were strained further amid a ramp-up of
pre-election spending by the current administration.
S&P said, "Economic growth in Argentina has been below that of
peers with a similar level of development for many years, and we
expect the Argentine economy will contract in 2023 and 2024.
Meanwhile, inflation in 2023 is likely to be close to 200% year
over year, and will continue to stress the country's already weak
socioeconomic indicators. We expect the economic contraction and
exchange-rate depreciation will result in Jujuy's GDP per capita at
$8,100 in 2023, below the estimated national level of $13,700
(calculated at the official exchange rate)."
Jujuy has a broad green agenda that includes energy transition
activities in solar and lithium. Located in the so-called "lithium
triangle," the province's mineral industry has significant
potential. Of the three sites that currently produce lithium in
Argentina, two are in the province of Jujuy, while there are
several other projects in the pipeline. Lithium could help boost
the economy in the next few years, but S&P doesn't expect any large
immediate impact on the budget. Royalties are very small--only
3%--and the tax rate on lithium miners is low due to tax benefits
that are part of the mining law.
In May 2023, finance minister Carlos Sadir was elected governor and
will take office on December 10. S&P expects continuity in efforts
to balance infrastructure spending with cautious fiscal management.
Amid the increasingly strained financial conditions, including very
limited access to external funding, the province decided to
restructure its international bond in 2021, which weighs on its
assessment of Jujuy's financial management.
S&P said, "Finally, we assess the institutional framework for
Argentina's LRGs as very volatile and underfunded. In particular,
in our view, the sovereign has very weak institutional
predictability and a volatile intergovernmental system that has
been subject to modifications to fiscal regulations and
inconsistency over the years partly due to consistently unstable
macroeconomic conditions." This jeopardizes the LRGs' financial
planning and, consequently, their credit quality.
In accordance with S&P's relevant policies and procedures, the
Rating Committee was composed of analysts that are qualified to
vote in the committee, with sufficient experience to convey the
appropriate level of knowledge and understanding of the methodology
applicable. At the onset of the committee, the chair confirmed that
the information provided to the Rating Committee by the primary
analyst had been distributed in a timely manner and was sufficient
for Committee members to make an informed decision.
After the primary analyst gave opening remarks and explained the
recommendation, the Committee discussed key rating factors and
critical issues in accordance with the relevant criteria.
Qualitative and quantitative risk factors were considered and
discussed, looking at track-record and forecasts.
The committee's assessment of the key rating factors is reflected
in the Ratings Score Snapshot above.
The chair ensured every voting member was given the opportunity to
articulate his/her opinion. The chair or designee reviewed the
draft report to ensure consistency with the Committee decision. The
views and the decision of the rating committee are summarized in
the above rationale and outlook. The weighting of all rating
factors is described in the methodology used in this rating
action.
Ratings List
RATINGS AFFIRMED
JUJUY (PROVINCE OF)
Issuer Credit Rating CCC-/Negative/--
JUJUY (PROVINCE OF)
Senior Unsecured CCC-
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B R A Z I L
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AMERICANAS SA: To Get $4.9 Billion Capital Increase in Debt Deal
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Cristiane Lucchesi and Daniel Cancel at Bloomberg News report that
Brazilian retailer Americanas SA reached an agreement with bank
creditors to overhaul some of its debt, in a key step toward
eventually exiting bankruptcy protection.
Some 11 months after sinking into a crisis due to an accounting
fraud that more than doubled its debt to 42.5 billion reais ($8.7
billion), a binding agreement was signed with creditors holding
more than 35% of company's debt, excluding intercompany credits,
Americanas said in a filing Monday, Nov. 27, according to Bloomberg
News. Other creditors also showed interest in participating on the
same deal in a non-binding way, the company said, Bloomberg News
notes.
The agreement, which will allow Americanas to present a new plan in
court, is the result of "extensive" negotiations with creditors who
hold more than 50% of the company's debt combined, the retailer
said. It added that the parts committed to backing the plan in an
upcoming meeting, scheduled for Dec. 19, Bloomberg News relays.
Although Americanas doesn't name creditors in the filing, banks
have the majority of the debt, Bloomberg News says. Their buy-in
was seen as key to avoid any risk of liquidation for the company,
which has seen digital sales sink while losing millions of clients
and shuttering dozens of stores in the past year, Bloomberg News
relays.
Shares fell as much as 6.4% in Sao Paulo trading with volume almost
give times higher than the 100-day average,Bloomberg News notes.
The market capitalization stands at about 940 million reais,
Bloomberg News discloses.
The debt restructuring proposal includes a cash injection and
so-called DIP financing of 12 billion reais by the top
shareholders, and a debt-to-equity swap from creditors of as much
as 12 billion reais, Bloomberg News says. That could boost the
company's capital by up to 24 billion reais ($4.9 billion),
Bloomberg News relays.
All shareholders will be allowed to participate in the capital
increase, Bloomberg News notes. Americanas will seek approval from
the board of directors to grant one subscription bonus to every
three shares issued as an additional benefit, it said, Bloomberg
News discloses.
The company also secured a 1.5 billion-real bank or judicial
insurance guarantee, available for two years from the conclusion of
the restructuring stages or until the end of the judicial
reorganization, whichever comes first, Bloomberg News relays.
The plan also allocated as much as 8.7 billion for the payment of
financial creditors, through a reverse auction or early payment of
credits at a discount, Bloomberg News says. The company expects to
have 1.875 billion reais in gross debt after implementing the
measures set out in the plan, Bloomberg News notes.
The deal comes after the retailer published new earnings reports
for 2021 and 2022 that showed it lost nearly 20 billion reais in
the period, Bloomberg News relays. The estimated size of the
accounting fraud was 25 billion reais, bigger than what it had
initially estimated, Bloomberg News says.
The crisis at Americanas has been a headache for the billionaire
trio Jorge Paulo Lemann, Carlos Sicupira and Marcel Telles, who own
about 30% of the company -- though the hit to their reputation as
the savviest businessmen in the country outweighed the overall
financial impact, Bloomberg News discloses. The blow up also
contributed to a credit crunch for Brazilian companies, and put
more pressure on retailers already reeling from high interest
rates, Bloomberg News notes.
Americanas, founded in 1929, is one of Brazil's most iconic
retailers and is known for its affordable prices for everything
from kitchen appliances to clothes, candy and toys, Bloomberg News
says.
The crisis engulfed the firm on Jan. 11 after a new chief executive
officer hired from outside the company took over, Bloomberg News
discloses. Previously, the same CEO had run the management team
for decades, Bloomberg News relays.
The incoming CEO Sergio Rial, who has a long resume at firms like
Banco Santander SA, BRF SA and Cargill Inc., resigned just nine
days into the job alleging "accounting inconsistencies" estimated
at 20 billion reais, Bloomberg News relates. The board moved
immediately to hire new leaders and sideline the remaining
executives from the previous management team, while also fending
off creditors and trying to keep operations from collapsing,
Bloomberg News notes.
Blame Game
The new team has accused the previous group led by Miguel Gutierrez
of hiding debts and inflating profits by falsifying advertising
contracts and obscuring supply-chain financing transactions,
Bloomberg News relays. Gutierrez, who has relocated to Spain where
he has nationality, called himself a scapegoat in one of the only
comments he's made through lawyers, Bloomberg News relays.
Americanas, now led by CEO Leonardo Coelho and CFO Camille Loyo
Faria, has said it expects to reduce debt to as low as 1 billion
reais in 2025 and post positive earnings before interest, taxes,
depreciation and amortization of close to 2 billion reais,
Bloomberg News adds.
About Americanas SA
Americanas was one of the largest diversified retail chains in
Brazil, with a wide platform of physical stores, robust
e-commerce,
fintech, and has just entered into the niche food retail. It is
listed on B3, being indirectly controlled by billionaire Jorge
Paulo Lemann, Carlos Alberto Sicupira and Marcel Telles.
The retailer nosedived in January 2023 after becoming mired in an
accounting scandal. The firm filed for bankruptcy at a court in
Rio de Janeiro on Jan. 19, 2023.
Americanas sought protection under Chapter 15 of the Bankruptcy
Code (Bankr. S.D.N.Y. Case No. 23-10092) on Jan. 25, 2023. White &
Case LLP, led by John K. Cunningham, is the U.S. counsel.
BRAZIL: Sees Steel Production Dip in 2023
-----------------------------------------
Richard Mann at Rio Times Online reports that from January to
October 2023, Brazil's crude steel production declined by 8.1%,
totaling 26.6 million tons.
In contrast, during the same period in 2022, production was at 28.9
million tons. This data was released by Instituto Aco Brasil,
according to Rio Times Online.
The institute's president, Marco Polo Mello Lopes, discussed this
decrease with journalists, the report adds.
About Brazil
Brazil is the fifth largest country in the world and third largest
in the Americas. Luiz Inacio Lula da Silva won the 2022 Brazilian
general election. He was sworn in on January 1, 2023, as the 39th
president of Brazil, succeeding Jair Bolsonaro.
Fitch Ratings upgraded on July 26, 2023, Brazil's Long-Term
Foreign-Currency Issuer Default Rating (IDR) to 'BB', from 'BB-',
with a Stable Outlook. The upgrade reflects better-than-expected
macroeconomic and fiscal performance amid successive shocks in
recent years, proactive policies and reforms that have supported
this, and Fitch's expectation that the new government will work
toward further improvements.
In mid-June 2023, S&P Global Ratings, revised the outlook on its
long-term global scale ratings on Brazil to positive from stable.
S&P affirmed its 'BB-/B' long- and short-term foreign and local
currency sovereign credit ratings on Brazil. S&P also affirmed its
'brAAA' national scale rating, and the outlook remains stable. The
transfer and convertibility assessment remains 'BB+'. The positive
outlook reflects signs of greater certainty about stable fiscal and
monetary policy that could benefit Brazil's still-low GDP growth
prospects. Continued GDP growth plus the emerging framework for
fiscal policy could result in a smaller government debt burden than
expected, which could support monetary flexibility and sustain the
country's net external position.
Moody's credit rating for Brazil was last set at Ba2 in 2018 with
stable outlook. Moody's affirmed the Ba2 issuer ratings and
senior unsecured bond ratings in April 2022.
DBRS Inc., on August 15, 2023, upgraded Brazil's Long-Term
Foreign and Local Currency - Issuer Ratings to BB from BB (low).
At the same time, DBRS Morningstar confirmed Brazil's
Short-term Foreign and Local Currency - Issuer Ratings at R-4.
The trend on all ratings is Stable (March 2018).
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J A M A I C A
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JAMAICA: Forex Market Relatively Stable, Says BOJ
-------------------------------------------------
Richard Byles at RJR News reports that the Bank of Jamaica (BOJ)
says the foreign exchange market has remained relatively stable
over the last four months.
BOJ Governor Richard Byles says the stability in the foreign
exchange market is a reflection of continued strong tourism and
remittance inflows as well as actions taken by the bank to prevent
undue volatility, according to RJR News.
"BOJ has sold approximately US$887 million via its B-FXITT facility
for the 2023 calendar year to the end of October. When these sales
are set against BOJ purchases, however, the result is that the bank
net purchased approximately US$893 million over the period, almost
double that purchased over the same period in 2022," he pointed
out, the report notes.
Mr. Byles said one of the positive outcomes of the stable foreign
exchange rate is that it has helped to anchor inflation
expectations, the report says.
About Jamaica
Jamaica is an island country situated in the Caribbean Sea.
Jamaica is an upper-middle income country with an economy heavily
dependent on tourism. Other major sectors of the Jamaican economy
include agriculture, mining, manufacturing, petroleum refining,
financial and insurance services.
In October 2023, Moody's upgraded the Government of Jamaica's
long-term issuer and senior unsecured ratings to B1 from B2, and
senior unsecured shelf rating to (P)B1 from (P)B2. The outlook has
been changed to positive from stable. The upgrade of Jamaica's
rating to B1 reflects the government's sustained commitment to
fiscal consolidation and debt reduction. The positive outlook
reflects Moody's assessment that a continuation of the favorable
fiscal trajectory will further increase Jamaica's credit
resilience.
S&P Global Ratings raised on September 13, 2023, its long-term
foreign and local currency sovereign credit ratings on Jamaica to
'BB-' from 'B+', and affirmed its short-term foreign and local
currency sovereign credit ratings at 'B'. The stable outlook
reflects S&P's expectation that the government will remain
committed to prudent fiscal policies and reducing debt, as well as
supportive economic policies including a flexible exchange rate
regime and effective monetary policy.
In March 2022, Fitch Ratings affirmed Jamaica's Long-Term Foreign
Currency Issuer Default Rating (IDR) at 'B+'. The Rating Outlook is
Stable.
JAMAICA: Trade Deficit Declined for January to July
---------------------------------------------------
RJR News reports that Jamaica's trade deficit was less than last
year for the January to July period.
The Statistical Institute of Jamaica (STATIN) says the difference
between the sum earned from export and what was spent on imports
was US$3.21 billion, according to RJR News.
That's down from the US$3.43 billion deficit registered last year,
the report notes.
Spending on imports was up 1.5 per cent, valued at $4.44 billion
versus $4.37 billion in the similar period last year, the report
relays.
Revenues from total exports came in at US$1.23 billion, an increase
of 31 per cent compared with the US$939 million made for January to
July 2022, the report adds.
About Jamaica
Jamaica is an island country situated in the Caribbean Sea.
Jamaica is an upper-middle income country with an economy heavily
dependent on tourism. Other major sectors of the Jamaican economy
include agriculture, mining, manufacturing, petroleum refining,
financial and insurance services.
In October 2023, Moody's upgraded the Government of Jamaica's
long-term issuer and senior unsecured ratings to B1 from B2, and
senior unsecured shelf rating to (P)B1 from (P)B2. The outlook has
been changed to positive from stable. The upgrade of Jamaica's
rating to B1 reflects the government's sustained commitment to
fiscal consolidation and debt reduction. The positive outlook
reflects Moody's assessment that a continuation of the favorable
fiscal trajectory will further increase Jamaica's credit
resilience.
S&P Global Ratings raised on September 13, 2023, its long-term
foreign and local currency sovereign credit ratings on Jamaica to
'BB-' from 'B+', and affirmed its short-term foreign and local
currency sovereign credit ratings at 'B'. The stable outlook
reflects S&P's expectation that the government will remain
committed to prudent fiscal policies and reducing debt, as well as
supportive economic policies including a flexible exchange rate
regime and effective monetary policy.
In March 2022, Fitch Ratings affirmed Jamaica's Long-Term Foreign
Currency Issuer Default Rating (IDR) at 'B+'. The Rating Outlook is
Stable.
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P E R U
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PERU: Economy Slides 1.29% in September, Missing Forecasts
----------------------------------------------------------
Reuters, reports that Peru's gross domestic product (GDP) shrank
1.29% in September from the same month last year, the government's
INEI statistics agency said on Wednesday, Nov. 15, marking a fifth
consecutive month of decline and landing well below analysts'
expectations.
According to the report, analysts polled by Reuters had forecast a
contraction of 0.65%.
Meanwhile, INEI reported that the economy shrunk 0.63% year-on-year
over the first nine months of 2023, Reuters relates.
"The country's productive activity was affected by the state of
alert over the coastal El Nino phenomenon, which interrupted the
normal development of economic sectors such as agriculture,
manufacturing and construction," INEI said in a statement, says the
report. "At the same time, there was a recurrence of
socio-environmental conflicts and technical and climate change
factors, which caused temporary suspensions in productive
activities," it added.
Reuters says the contraction was led by year-on-year declines in
Peru's agriculture, manufacturing, construction and finance
sectors, even as the fishing and mining and energy sectors
improved.
The figure comes after Adrian Armas, the chief economist of Peru's
central bank warned in early November that July to September could
mark a third straight quarter of economic contraction in the Andean
country, the world's second-largest copper producer, according to
Reuters.
Peru had slid into a technical recession earlier this year after
two quarters of negative growth due to the adverse impacts of the
El Nino weather phenomenon, lower private investment and lingering
effects from earlier social conflicts, recounts the report.
Armas told a conference that the central bank's current forecast of
0.9% economic growth over 2023 - down from a prior forecast of 2.2%
growth - faces "downward pressure," the report notes.
Peru's economy ministry had meanwhile flagged a possible turnaround
in the fourth quarter as a package of stimulus measures aimed at
boosting investments, particularly in the critical mining sector,
take effect, adds the report.
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