/raid1/www/Hosts/bankrupt/TCRLA_Public/240118.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, January 17, 2024, Vol. 25, No. 13
Headlines
A R G E N T I N A
ARGENTINA: Inflation Hit 211% in 2023, Fastest Gain in 3 Decades
ARGENTINA: Milei Vows to Shutter Central Bank "Sooner or Later"
CLISA: S&P Downgrades ICR to 'CC' on Consent Solicitation
[*] ARGENTINA: Best Soy Crop in Five Years Set to be Boon for Milei
B R A Z I L
BRAZIL: Inflation Ends 2023 Above Forecasts But Within Target
BRAZIL: USDA Revises Soy Forecast, Affecting Prices
C H I L E
CHILE: Consumer Prices Post Biggest Monthly Drop Since 2013
D O M I N I C A N R E P U B L I C
DOMINICAN REPUBLIC: Abinader Prioritizes Renewable Energy Projects
- - - - -
=================
A R G E N T I N A
=================
ARGENTINA: Inflation Hit 211% in 2023, Fastest Gain in 3 Decades
----------------------------------------------------------------
Manuela Tobias at Bloomberg News reports that Argentina ended 2023
with the fastest inflation in more than three decades as President
Javier Milei started to unwind a thicket of currency controls and
price freezes imposed by the previous administration.
Consumer prices soared 211.4 percent in December from a year
earlier, according to government data published, according to
Bloomberg News. They jumped 25.5 percent from November, below the
30 percent median estimate of economists surveyed by Bloomberg.
Since taking office December 10, Milei devalued the peso 54 percent
and eliminated price controls on hundreds of everyday consumer
products, reversing the policies imposed by former economy minister
Sergio Massa, who ran against him for president, Bloomberg News
notes. The libertarian leader also halted runaway money-printing
that had flared up during the presidential campaign, Bloomberg News
relays.
Milei braced the country for the tough months ahead in his
inauguration speech, reiterating "there is no money" and that
Argentina risked hyperinflation if it didn"t change path, Bloomberg
News discloses. That hasn't stopped worker unions from calling a
general strike on January 24 nor Argentine residents from banging
pots and pans on the streets in protest of his austerity measures,
Bloomberg News adds.
About Argentina
Argentina is a country located mostly in the southern half of South
America. Its capital is Buenos Aires. Javier Milei is the current
president of Argentina after winning the November 19, 2023 general
election. He succeeded Alberto Angel Fernandez 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.
ARGENTINA: Milei Vows to Shutter Central Bank "Sooner or Later"
---------------------------------------------------------------
Ignacio Olivera Doll at Bloomberg News reports that President
Javier Milei, who has won praise for his pragmatism since taking
office, is standing by one of his most controversial campaign
pledges: closing Argentina"s Central Bank.
The 86-year-old institution will be shut down "sooner or later,"
Milei told Radio La Red, when asked if he still planned to
dollarise the economy, according to Bloomberg News.
Bloomberg News relays that Milei also predicted that December's
monthly inflation figure will be below 30 percent - and closer to
25 percent - "which will show a resounding success" of his economic
team, given expectations were at one point as high as 45 percent.
The annual inflation rate is nonetheless on track to surge past 200
percent, vaulting Argentina ahead of socialist-run Venezuela as the
country with the fastest consumer price gains in Latin America,
Bloomberg News notes.
Doubts about Milei's commitment to shutting down the Central Bank
grew as he dialled back his rhetoric after winning November's
run-off vote, Bloomberg News discloses. The libertarian outsider's
decision to abandon some of his more strident advisers for members
of former president Mauricio Macri's team was also seen as a signal
he would moderate his ambitions, Bloomberg News says.
After the new government took power in December, Economy Minister
Luis Caputo told LN+ TV that the "rallying flags" of dollarisation
and closing the Central Bank "haven't been set aside," Bloomberg
News relays. But Santiago Bausili, Milei's choice to lead the
monetary authority and Caputo"s former business partner, also said
at the time the institution wouldn"t be shuttered while he"s at the
helm, Bloomberg News notes.
There are currently only about a dozen countries that operate
without a Central Bank, Bloomberg News notes. The list includes
Panama, Kiribati, Tuvalu, Micronesia, Andorra, Marshall Islands,
Monaco, Nauru and Palau, Bloomberg News relays. Most of them have
small populations and some are considered tax havens, Bloomberg
News notes.
Milei also used his radio interview to flag that Argentina has
received 60 requests for bilateral meetings at the upcoming World
Economic Forum in Davos, Switzerland, Bloomberg News relays. He
said he's confident he'll secure the necessary congressional
support to pass the sweeping package of reforms he recently sent to
lawmakers. And he praised the new staff-level agreement reached
with the International Monetary Fund, Bloomberg News discloses.
"It was the fastest negotiation with the IMF in history," the
president said, Bloomberg News adds.
About Argentina
Argentina is a country located mostly in the southern half of South
America. Its capital is Buenos Aires. Javier Milei is the current
president of Argentina after winning the November 19, 2023 general
election. He succeeded Alberto Angel Fernandez 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.
CLISA: S&P Downgrades ICR to 'CC' on Consent Solicitation
---------------------------------------------------------
S&P Global Ratings, on Jan. 12, 2024, lowered its global scale
issuer credit and issue-level rating on CLISA -- Compania
Latinoamericana de Infraestructura y Servicios S.A. (CLISA) to
'CC' from 'CCC-'.
The negative outlook reflects that S&P expects to lower the issuer
credit rating to selective default (SD) and the issue-level rating
on the 2027 senior secured notes to 'D' once the consent is
obtained and the indenture supplement is executed.
The downgrade follows CLISA's consent solicitation from holders of
its $343 million outstanding 2027 senior secured notes to modify
the portion paid in cash and the PIK portion of the Jan. 25, 2024,
coupon. According to the original indenture, CLISA would pay the
8.5% coupon with cash (6.25%) and in kind (2.25%), while the
company is asking for the consent to pay the full amount in kind.
The proposed amendment requires an at least 75% acceptance from the
creditholders of the aggregate principal amount of the outstanding
notes. The consent solicitation will expire on Feb. 9, 2024, unless
extended or terminated earlier. Additionally, the company announced
that it will pay an aggregate consent consideration of $3.25
million, to be divided pro rata among creditors who give their
consent.
[*] ARGENTINA: Best Soy Crop in Five Years Set to be Boon for Milei
-------------------------------------------------------------------
Buenos Aires Times reports that Argentina is on course to produce
its best soybean crop in five seasons - 52 million metric tons - as
El Nino-fueled rains water fields that were parched by several
years of drought.
The forecast for the second-quarter harvest rose by four percent
from a December estimate, the Rosario Board of Trade said in a
monthly report, according to Buenos Aires Times. Output is poised
to rebound after precipitation finally came to a vast western
region of the Pampas crop belt, the report notes.
"The change in the west has been notorious throughout the country,"
analysts led by Cristian Russo wrote in the report, Buenos Aires
Times says.
An Argentine soy harvest of 52 million tons would surpass last
year's miserly crop by 160 percent, impacting not only benchmark
futures trading in Chicago but also the chances that new President
Javier Milei can turn around the country"s economy, the report
discloses. That's because shipments of the oilseed normally
account for roughly a quarter of all the country"s export revenues,
the report says.
Argentina is usually the biggest exporter of soy meal and soy oil,
and the third-biggest corn supplier, the report relays. But
dryness last season was so severe that Brazil overtook it for the
first time in 25 years as the world's top provider of meal, the
report notes.
The Rosario prediction falls in line with estimates from
Canada-based satellite analytics firm EarthDaily, which had
recently increased its base-case Argentine soy forecast to 52.4
million tons, the report relays.
The Rosario analysts also boosted their monthly corn estimate by
5.4 percent to 59 million tons, which would be a record crop, as
moist soils catapult plants" yield potential, the report adds.
About Argentina
Argentina is a country located mostly in the southern half of South
America. Its capital is Buenos Aires. Javier Milei is the current
president of Argentina after winning the November 19, 2023 general
election. He succeeded Alberto Angel Fernandez 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.
===========
B R A Z I L
===========
BRAZIL: Inflation Ends 2023 Above Forecasts But Within Target
-------------------------------------------------------------
Buenos Aires Times reports that Brazil's annual inflation eased
less than expected though remained within the central bank's
tolerance range last year, underscoring the challenges ahead to
easing monetary policy.
Official data released showed consumer prices rose 4.62 percent in
December from a year earlier, above the 4.55 percent median
estimate in a Bloomberg survey. Monthly inflation accelerated to
0.56 percent, according to Buenos Aires Times.
The central bank targets inflation at three percent this year and
3.25 percent in 2023, with a tolerance range of plus or minus 1.5
percentage points, Buenos Aires Times relays. When price increases
exceed those goals, the head of the bank is required by law to
write a public letter explaining why it missed the target, the
report notes.
Buenos Aires Times says that Governor Roberto Campos Neto has
missed inflation goals since 2021, when the pandemic disrupted
global supply-chains and sent energy and food prices soaring. After
leading one of the world's most aggressive tightening campaigns
that took borrowing costs to six-year highs, the bank's board began
relaxing monetary policy last August, the report relays. It has
lowered the benchmark Selic rate by two percentage points to 11.75
percent and signalled two more half-point cuts through March, the
report discloses.
Buenos Aires Times discloses that Brazil's inflation has now slowed
for a third straight month, likely encouraging the central bank to
stay on its current monetary loosening path. Still, analysts
cautioned that deeper cuts to borrowing costs remain unlikely as
expectations for consumer price increases stand above this year's
goal, the report relays.
"We think that the Selic rate will be lowered by less than most
anticipate over the course of 2024," William Jackson, chief
emerging markets economist at Capital Economics, wrote in a note,
the report notes.
Annual inflation eased from its over-12 percent peak in mid-2022,
the report discloses. Closely watched core measures that strip out
volatile items like food and energy are edging closer to the
central bank's target, the report relays. Still, prices of
services that are sensitive to monetary policy are cooling off more
slowly, the report notes.
All of the nine groups of goods and services surveyed by the
statistics agency became more expensive in December, the report
notes. A 1.11 percent jump in the cost of food and beverages and a
0.48 percent increase in transportation were the main drivers of
inflation, the report discloses.
Buenos Aires Times relays that in recent months, spiking airfares
have caused concern among the administration of President Luiz
Inacio Lula da Silva, who returned to power promising to improve
Brazilians' living standards. The government is considering
multiple solutions to try to lower costs, including offering
discounted tickets to students and retirees, the report notes.
Daniel Karp, an economist at Banco Santander SA, sees some relief
on the horizon for Brazilian households, the report says.
"Despite the upward surprise, we believe the broad view of
inflation remains quite benign," he wrote in a note. "The recent
upward surprises were mostly driven by volatile items," he added.
Taming inflation is proving challenging all over Latin America, the
report relays. After months of receding price pressures, inflation
in Mexico accelerated with higher consumer spending, which may push
back the timing of rate cuts, the report discloses. Central
bankers in Colombia and Peru are bracing for soaring food prices
due to El Nino weather conditions, the report says. On the other
hand, annual inflation in Chile posted its biggest monthly drop in
more than a decade, supporting bets for an acceleration of the
easing cycle, the report relays.
Policymakers in Brazil are forging ahead with gradual rate cuts, as
they see risks of persistent price pressures, the report says.
Lula's government is still debating budget goals, with analysts
bracing for higher public spending amid an economic deceleration,
Buenos Aires Times 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.
S&P Global Ratings raised on Dec. 19, 2023, its long-term global
scale ratings on Brazil to 'BB' from 'BB-'. The outlook on the
long-term ratings is stable. S&P affirmed Brazil's global scale
short-term ratings at 'B' and its national scale long-term rating
at 'brAAA'. S&P also raised the transfer and convertibility
assessment on the country to 'BBB-' from 'BB+'. S&P said, "The
stable outlook reflects our expectation that Brazil will maintain a
strong external position, thanks to strong commodity output and
limited external financing needs. We also believe Brazil's
institutional framework can sustain stable and pragmatic
policymaking based on extensive checks and balances across the
executive, legislative, and judicial branches of government. We
expect a very gradual fiscal correction but anticipate fiscal
deficits will remain large."
Fitch Ratings affirmed on Dec. 15, 2023, Brazil's Long-Term
Foreign-Currency Issuer Default Rating (IDR) at 'BB' with a Stable
Outlook. Fitch said Brazil's ratings are supported by its large and
diverse economy, high per-capita income, and deep domestic markets
and a large cash cushion that support the sovereign's financing
flexibility and its high local-currency debt share. Strong external
finances support resilience to shocks, underpinned by a flexible
exchange rate, robust international reserves and a sovereign net
external creditor position. The ratings are constrained by weak
economic growth potential, relatively low governance scores, high
and rising government debt/GDP, and budgetary rigidities. A new
fiscal framework introduced this year aims to anchor a gradual
consolidation process and address these fiscal weaknesses, but its
effectiveness is increasingly unclear.
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).
BRAZIL: USDA Revises Soy Forecast, Affecting Prices
---------------------------------------------------
Lachlan Williams at Rio Times Online reports that the USDA's
updated forecast for Brazil's soybean production is influencing soy
prices on the Chicago Board of Trade.
The new forecast is set at 157 million tons, lower than the
previous 161 million tons, the report notes. Yet, this new
estimate matches market expectations, according to Rio Times
Online.
It's also similar to Brazil's National Supply Company's (Conab)
prediction of 155.27 million tons for the 2023/24 season, 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.
S&P Global Ratings raised on Dec. 19, 2023, its long-term global
scale ratings on Brazil to 'BB' from 'BB-'. The outlook on the
long-term ratings is stable. S&P affirmed Brazil's global scale
short-term ratings at 'B' and its national scale long-term rating
at 'brAAA'. S&P also raised the transfer and convertibility
assessment on the country to 'BBB-' from 'BB+'. S&P said, "The
stable outlook reflects our expectation that Brazil will maintain a
strong external position, thanks to strong commodity output and
limited external financing needs. We also believe Brazil's
institutional framework can sustain stable and pragmatic
policymaking based on extensive checks and balances across the
executive, legislative, and judicial branches of government. We
expect a very gradual fiscal correction but anticipate fiscal
deficits will remain large."
Fitch Ratings affirmed on Dec. 15, 2023, Brazil's Long-Term
Foreign-Currency Issuer Default Rating (IDR) at 'BB' with a Stable
Outlook. Fitch said Brazil's ratings are supported by its large and
diverse economy, high per-capita income, and deep domestic markets
and a large cash cushion that support the sovereign's financing
flexibility and its high local-currency debt share. Strong external
finances support resilience to shocks, underpinned by a flexible
exchange rate, robust international reserves and a sovereign net
external creditor position. The ratings are constrained by weak
economic growth potential, relatively low governance scores, high
and rising government debt/GDP, and budgetary rigidities. A new
fiscal framework introduced this year aims to anchor a gradual
consolidation process and address these fiscal weaknesses, but its
effectiveness is increasingly unclear.
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).
=========
C H I L E
=========
CHILE: Consumer Prices Post Biggest Monthly Drop Since 2013
-----------------------------------------------------------
globalinsolvency.com, citing Bloomberg News, reports that Chilean
consumer prices unexpectedly posted their biggest monthly drop in
more than a decade in December, sending swap rates tumbling and
paving the way for more sharp interest rate cuts.
Prices fell 0.5% last month, more than all estimates in a Bloomberg
survey that had a -0.1% median forecast, according to
globalinsolvency.com.
Annual inflation eased to 3.9%, the national statistics agency
reported, the report relays. A closely-watched price gauge that
excludes volatile items increased 5.4% in the year through
December, the report notes. Chile's central bank has signaled it
will deliver another big rate cut at its Jan. 31 meeting, with
policymakers saying inflation is "clearly" easing toward the 3%
target, the report says.
While the cost of living had risen more than expected in November,
board members attributed the surprise to volatile items, the report
discloses.
More broadly, they are getting help from weak consumer demand and
sluggish economic growth, the report notes.
Two-year swap rates, a measure of future monetary policy
expectations, tumbled as much as 24 basis points to 4.97%, the
lowest level since November 2021, as traders weighed odds the
central bank will accelerate rate cuts following last month's drop
of 75 basis points, the report adds.
===================================
D O M I N I C A N R E P U B L I C
===================================
DOMINICAN REPUBLIC: Abinader Prioritizes Renewable Energy Projects
------------------------------------------------------------------
Dominican Today reports that President Luis Abinader, through
decree 3-24, has emphasized the Dominican Republic's commitment to
enhancing its energy sector. The decree declares the promotion and
development of traditional electricity generation projects and
renewable energy sources within the Dominican territory as a matter
of high national interest, according to Dominican Today. This
initiative aims to meet the increasing demand for electricity and
ensure the stability of the electrical service across the nation,
the report notes.
Article 2 of the decree mandates that all traditional and renewable
energy projects adhere to existing legal provisions, the report
relays. This compliance is essential for guaranteeing the economic
sustainability, stability, efficiency, quality, security, and
transparency of the electrical service, the report says. The
decree underscores the importance of these projects, considering
their significant economic and social implications for the
Dominican Republic, the report adds.
About Dominican Republic
The Dominican Republic is a Caribbean nation that shares the island
of Hispaniola with Haiti to the west. Capital city Santo Domingo
has Spanish landmarks like the Gothic Catedral Primada de America
dating back 5 centuries in its Zona Colonial district. Luis Rodolfo
Abinader Corona is the current president of the nation.
TCR-LA reported in April 2019 that Juan Del Rosario of the UASD
Economic Faculty cited a current economic slowdown for the
Dominican Republic and cautioned that if the trend continues,
growth would reach only 4% by 2023. Mr. Del Rosario said that if
that happens, "we'll face difficulties in meeting international
commitments."
An ongoing concern in the Dominican Republic is the inability of
participants in the electricity sector to establish financial
viability for the system.
On December 4, 2023, the TCR-LA reported that Fitch Ratings has
affirmed Dominican Republic's Long-Term Foreign-Currency Issuer
Default Rating (IDR) at 'BB-' and revised the Outlook to Positive
from Stable. Fitch says the Positive Outlook reflects a trend
improvement in governance, and robust growth prospects that should
lead to continued gains in per capita income. According to Fitch,
growth has decelerated in 2023, but it expects Dominican Republic
to recover to high levels during 2024-2025. External liquidity
metrics have improved in recent years, and foreign currency share
of government debt is on a downward path.
In August 2023, Moody's Investors Service changed the outlook on
the Government of Dominican Republic's ratings to positive from
stable and affirmed the local and foreign-currency long-term issuer
and senior unsecured ratings at Ba3. Moody's said the key drivers
for the outlook change to positive are: (i) sustained high growth
rates have enhanced the scale and wealth levels of the economy; and
(ii) a material decline in the government debt burden coupled with
improved fiscal policy effectiveness will support medium-term debt
sustainability.
The affirmation of the Ba3 ratings balances the Dominican
Republic's strong economic growth dynamics and relatively contained
susceptibility to event risks, with a comparatively weaker fiscal
position, reflecting long-standing credit challenges which include:
(i) a shallow revenue base compared to peers, (ii) weak debt
affordability metrics, and (iii) high exposure to foreign currency
borrowing.
S&P Global Ratings, in December 2022, raised its long-term foreign
and local currency sovereign credit ratings on the Dominican
Republic to 'BB' from 'BB-'. The outlook on the long-term ratings
is stable. S&P affirmed its 'B' short-term sovereign credit
ratings. S&P also revised its transfer and convertibility (T&C)
assessment to 'BBB-' from 'BB+'. The stable outlook reflects S&P's
expectation of continued favorable GDP growth and policy continuity
over the next 12-18 months that will likely stabilize the
government's debt burden.
In February 2023, S&P said its BB ratings reflect the country's
fast-growing and resilient economy. It also incorporates the
country's historical political and social challenges in passing
structural reforms to contain fiscal deficits, despite recent
improvements in the electricity sector. The ratings are constrained
by relatively high debt, a hefty interest burden, and limited
monetary policy flexibility.
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S U B S C R I P T I O N I N F O R M A T I O N
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