S&P examines Argentina's fiscal challenges
Mon May 2, 2005 11:30 AM ET
NEW YORK, May 2 (Reuters) - Standard & Poor's on Monday issued a report examining the key variables that will determine Argentina's economic development and its credit rating in the coming years as it exits the default that took place in November 2001.
The article, "Argentina: Exiting Once Again From Default," evaluates the prospects for economic growth and fiscal performance after the default by looking at the country's structural features and at the performance of other sovereigns in the first five years after they emerged from default, S&P said in a statement.
"The fiscal challenge facing the government over the coming years will be considerable, despite the recent high primary budget surpluses," said Joydeep Mukherji S&P credit analyst.
"Argentina does not have a history of sustaining high primary budget surpluses, and they may begin to decline as GDP growth decelerates," he added.
The public sector's recently reduced debt burden might actually grow beyond expectations in coming years due to unexpected contingent liabilities, as was the case in the early 1990s after Argentina emerged from its previous debt default, Mukherji said.
"A steady GDP growth rate will depend upon an improved policy environment that boosts investor confidence and spurs more private investment," Mr. Mukherji noted. "Argentina's recent history neither precludes nor presages such an outcome."
© Reuters 2005. All Rights Reserved.
I reports qui
S&P examines Argentina's fiscal challenges
Mon May 2, 2005 11:30 AM ET
NEW YORK, May 2 (Reuters) - Standard & Poor's on Monday issued a report examining the key variables that will determine Argentina's economic development and its credit rating in the coming years as it exits the default that took place in November 2001.
The article, "Argentina: Exiting Once Again From Default," evaluates the prospects for economic growth and fiscal performance after the default by looking at the country's structural features and at the performance of other sovereigns in the first five years after they emerged from default, S&P said in a statement.
"The fiscal challenge facing the government over the coming years will be considerable, despite the recent high primary budget surpluses," said Joydeep Mukherji S&P credit analyst.
"Argentina does not have a history of sustaining high primary budget surpluses, and they may begin to decline as GDP growth decelerates," he added.
The public sector's recently reduced debt burden might actually grow beyond expectations in coming years due to unexpected contingent liabilities, as was the case in the early 1990s after Argentina emerged from its previous debt default, Mukherji said.
"A steady GDP growth rate will depend upon an improved policy environment that boosts investor confidence and spurs more private investment," Mr. Mukherji noted. "Argentina's recent history neither precludes nor presages such an outcome."
I report qui
S&P examines Argentina's fiscal challenges
Mon May 2, 2005 11:30 AM ET
NEW YORK, May 2 (Reuters) - Standard & Poor's on Monday issued a report examining the key variables that will determine Argentina's economic development and its credit rating in the coming years as it exits the default that took place in November 2001.
The article, "Argentina: Exiting Once Again From Default," evaluates the prospects for economic growth and fiscal performance after the default by looking at the country's structural features and at the performance of other sovereigns in the first five years after they emerged from default, S&P said in a statement.
"The fiscal challenge facing the government over the coming years will be considerable, despite the recent high primary budget surpluses," said Joydeep Mukherji S&P credit analyst.
"Argentina does not have a history of sustaining high primary budget surpluses, and they may begin to decline as GDP growth decelerates," he added.
The public sector's recently reduced debt burden might actually grow beyond expectations in coming years due to unexpected contingent liabilities, as was the case in the early 1990s after Argentina emerged from its previous debt default, Mukherji said.
"A steady GDP growth rate will depend upon an improved policy environment that boosts investor confidence and spurs more private investment," Mr. Mukherji noted. "Argentina's recent history neither precludes nor presages such an outcome."
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