Moody’s Negative on Argentina

Moody’s has lowered the outlook on Argentina’s B3 rating to negative from stable, it says. The rating agency cites a “haphazard” policy environment, concerns about official reporting of GDP, inflation and other data, and the sovereign’s lack of resolution to debt arrears with the Paris Club. “The combination of unreliable economic statistics, continued underpayment of debt obligations, and lack of resolution of debt arrears one decade after the original default represent conditions that are unique among B-rated sovereigns and denote underlying credit risks,” Moody’s says. If the country’s main economic and debt metrics are affected these problems, the agency would consider a downgrade. S&P lowered the outlook in its B rating to negative in April. Following a meeting with the government, the IMF “regretted the lack of sufficient progress” Argentina has made regarding the quality of its inflation and GDP growth statistics, and may consider additional steps after further review, the IMF says. The reprimand was well short of what the fund was expected to do as far as punishing Argentina, Nomura says in a report.